Net Interest ~~Income/Net Interest Margin~~Income

Net interest income is FHN's largest source of revenue and is the difference between the interest earned on interest-earning assets (generally loans, leases and investment securities) and the interest expense incurred in connection with interest-bearing liabilities (generally deposits and borrowed funds). The level of net interest income is primarily a function of the difference between the effective yield on average interest-earning assets and the effective cost of interest-bearing liabilities. These factors are influenced by the pricing and mix of interest-earning assets and interest-bearing liabilities which, in turn, are impacted by external factors such as local economic conditions, competition for loans and deposits, the monetary policy of the FRB and market interest rates.

~~First Quarter 2021 versus Fourth Quarter 2020~~

~~Net~~The following tables present the major components of net interest income ~~for first quarter 2021 decreased $14 million from fourth quarter 2020. This decrease~~

~~reflected a $23 million decrease in interest income, the result of lower average loan balances, a decrease in day count,~~ and lower short-term rates. Partially offsetting the decrease in interest income was a $9 million decrease in interest expense, driven by deposit pricing discipline, as the rate on deposits decreased 6 basis points from fourth quarter 2020, as well as a $243 million decrease in average long-term borrowings.

~~The~~ net interest margin was 2.63% in first quarter 2021, down 8 basis points from fourth quarter 2020, while the net interest spread of 2.52% in first quarter 2021 was down 7 basis points. The decline in net interest margin for the quarter ended March 31, 2021 was primarily the result of a 13 basis point decrease in earning asset yields, largely driven by an unfavorable mix shift to lower yielding assets.margin:

Average earning assets increased $1.7 billion to $78.7 billion for first quarter 2021 from $77.0 billion for fourth quarter of 2020, primarily driven by a $3.1 billion increase in average interest-bearing cash,


~~FIRST HORIZON CORPORATION~~			71			~~1Q21 FORM 10-Q REPORT~~

partially offset by a $1.6 billion decrease in average loans and leases from a reduction in new originations, continued payoffs, and a decrease in loans to mortgage companies, partially offset by growth in asset-based lending and commercial real estate. The mix shift also contributed to a decline in earning asset yield from the prior quarter.

~~First Quarter 2021 versus First Quarter 2020~~

~~Net interest income increased $205 million in first quarter 2021 from $303 million infirst quarter~~ ~~2020. The~~ increase was primarily attributable to growth in average earning assets from the IBKC merger and Truist branch acquisition in third quarter 2020, deposit pricing discipline, and PPP lending, partially offset by the negative impact of lower interest yields on loans from the decline of LIBOR and Prime rates.

The net interest margin in first quarter 2021 was down 53 basis points from 3.16% in first quarter 2020. The net interest spread of 2.52% in first quarter 2021 was down 37 basis points from the first quarter ~~2020. The decline in net interest margin for the quarter ended March 31, 2021~~ ~~was primarily~~ the result of a 108 basis point decrease in earning asset yields, as the negative impact of lower short-term interest rates was partially offset by the benefit of purchase accounting accretion and PPP lending. An increase in average excess cash also negatively impacted net interest margin relative to the prior year. Driven by disciplined deposit pricing, the cost of interest-bearing liabilities decreased 71 basis points from first quarter ~~2020~~.

~~Average earning assets increased to $78.7 billion~~ ~~for first quarter~~ ~~2021~~ ~~from $38.8 billion for the same quarter of 2020, a~~ ~~$39.9 billion increase primarily driven by the IBKC merger and Truist branch acquisition.~~


~~FIRST HORIZON CORPORATION~~			7269			~~1Q21~~1Q22 FORM 10-Q REPORT

~~The following table presents the major components of net interest income and net interest margin.~~


PART I, ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)
Table of Contents

Table ~~2—Average Balances, Net Interest Income and Yields/Rates~~I.2.2

AVERAGE BALANCES, NET INTEREST INCOME & YIELDS/RATES


		Three Months Ended																			Three Months Ended
(Dollars in millions)	(Dollars in millions)	March 31, 2021						December 31, 2020						March 31, 2020						(Dollars in millions)	March 31, 2022						December 31, 2021						March 31, 2021
		Average Balance		Interest Income/Expense		Yield/Rate		Average Balance		Interest Income/Expense		Yield/Rate		Average Balance		Interest Income/Expense		Yield/Rate			Average Balance		Interest Income/Expense		Yield/Rate		Average Balance		Interest Income/Expense		Yield/Rate		Average Balance		Interest Income/Expense		Yield/Rate
Assets:	Assets:																			Assets:
Loans and leases:	Loans and leases:																			Loans and leases:
Commercial loans and leases	Commercial loans and leases	$	45,703	$	382	3.39	%	$	46,596	$	405	3.46	%	$	23,891	$	257	4.33	%	Commercial loans and leases	$	42,444	$	339	3.24	%	$	43,001	$	365	3.37	%	$	45,703	$	382	3.39	%
Consumer loans	Consumer loans	12,519		128		4.13		13,224		129		3.89		6,633		71		4.33		Consumer loans	11,638		108		3.71		11,681		110		3.77		12,519		128		4.09
Total loans and leases	Total loans and leases	58,222		510		3.55		59,820		534		3.56		30,524		328		4.33		Total loans and leases	54,082		447		3.34		54,682		475		3.45		58,222		510		3.54
Loans held for sale	Loans held for sale	842		7		3.16		1,030		8		3.22		590		7		4.67		Loans held for sale	1,156		10		3.51		1,252		11		3.49		842		7		3.16

Investment securities	Investment securities	8,321		29		1.41		8,213		27		1.29		4,467		28		2.51		Investment securities	9,668		38		1.59		9,269		33		1.43		8,321		29		1.41
Trading securities	Trading securities	1,418		7		2.03		1,292		7		2.05		1,831		13		2.91		Trading securities	1,594		11		2.75		1,551		10		2.50		1,418		7		2.03

Federal funds sold	Federal funds sold	45		—		0.12		34		—		0.15		10		—		1.05		Federal funds sold	81		—		0.19		52		—		0.17		45		—		0.12
Securities purchased under agreements to resell (a)	Securities purchased under agreements to resell (a)	554		—		(0.14)		405		—		0.02		817		2		1.13		Securities purchased under agreements to resell (a)	672		—		(0.07)		598		—		(0.11)		554		—		(0.14)
Interest-bearing deposits with banks	Interest-bearing deposits with banks	9,269		2		0.10		6,201		2		0.10		549		2		1.13		Interest-bearing deposits with banks	14,902		7		0.19		15,065		6		0.15		9,269		2		0.10

Total earning assets / Total interest income	Total earning assets / Total interest income	$	78,671	$	555	2.86	%	$	76,995	$	578	2.99	%	$	38,788	$	380	3.94	%	Total earning assets / Total interest income	$	82,155	$	513	2.52	%	$	82,469	$	535	2.58	%	$	78,671	$	555	2.85	%

Cash and due from banks	Cash and due from banks	1,250						1,204						610						Cash and due from banks	1,226						1,263						1,250
Goodwill and other intangible assets, net	Goodwill and other intangible assets, net	1,857						1,871						1,560						Goodwill and other intangible assets, net	1,802						1,815						1,857

Allowance for loan and lease losses	Allowance for loan and lease losses	(949)						(985)						(354)						Allowance for loan and lease losses	(658)						(714)						(949)
Other assets	Other assets	4,572						4,724						2,948						Other assets	4,062						4,192						4,572
Total assets	Total assets	$	85,401					$	83,809					$	43,552					Total assets	$	88,587					$	89,701					$	85,401

Liabilities and Shareholders' Equity:	Liabilities and Shareholders' Equity:																			Liabilities and Shareholders' Equity:

Interest-bearing deposits:	Interest-bearing deposits:																			Interest-bearing deposits:
Savings	Savings	$	27,370	$	12	0.19	%	$	27,090	$	18	0.27	%	$	12,117	$	26	0.87	%	Savings	$	26,330	$	3	0.05	%	$	26,731	$	4	0.06	%	$	27,370	$	12	0.19	%
Other interest-bearing deposits	Other interest-bearing deposits	15,491		6		0.16		15,057		7		0.18		8,743		14		0.65		Other interest-bearing deposits	16,557		4		0.09		15,900		4		0.10		15,491		6		0.16
Time deposits	Time deposits	4,836		6		0.47		5,387		6		0.44		3,356		14		1.67		Time deposits	3,343		4		0.51		3,695		5		0.56		4,836		6		0.47
Total interest-bearing deposits	Total interest-bearing deposits	47,697		24		0.20		47,534		31		0.26		24,216		54		0.90		Total interest-bearing deposits	46,230		11		0.10		46,326		13		0.11		47,697		24		0.20
Federal funds purchased	Federal funds purchased	996		—		0.10		831		—		0.10		747		2		1.19		Federal funds purchased	884		—		0.20		889		—		0.15		996		—		0.10
Securities sold under agreements to repurchase	Securities sold under agreements to repurchase	1,145		1		0.21		1,140		1		0.23		778		3		1.36		Securities sold under agreements to repurchase	1,001		—		0.10		1,252		1		0.20		1,145		1		0.33
Trading liabilities	Trading liabilities	518		1		0.73		367		1		0.78		751		3		1.76		Trading liabilities	614		2		1.69		556		2		1.38		518		1		0.73
Other short-term borrowings	Other short-term borrowings	139		—		1.01		142		—		0.98		1,686		5		1.20		Other short-term borrowings	110		1		0.13		108		—		0.11		139		—		0.08
Term borrowings	Term borrowings	1,670		18		4.39		1,913		20		4.16		791		8		4.01		Term borrowings	1,591		17		4.29		1,575		17		4.30		1,670		18		4.39
Total interest-bearing liabilities / Total interest expense	Total interest-bearing liabilities / Total interest expense	$	52,165	$	44	0.34	%	$	51,927	$	53	0.40	%	$	28,969	$	75	1.05	%	Total interest-bearing liabilities / Total interest expense	$	50,430	$	31	0.25	%	$	50,706	$	33	0.26	%	$	52,165	$	44	0.34	%

Noninterest-bearing liabilities:	Noninterest-bearing liabilities:																			Noninterest-bearing liabilities:
Noninterest-bearing deposits	Noninterest-bearing deposits	23,284						22,105						8,666						Noninterest-bearing deposits	27,926						28,282						23,284
Other liabilities	Other liabilities	1,603						1,568						915						Other liabilities	1,613						1,511						1,603
Total liabilities	Total liabilities	77,052						75,600						38,550						Total liabilities	79,969						80,499						77,052

Shareholders' equity	Shareholders' equity	8,054						7,914						4,707						Shareholders' equity	8,323						8,231						8,054
Noncontrolling interest	Noncontrolling interest	295						295						295						Noncontrolling interest	295						295						295
Total shareholders' equity	Total shareholders' equity	8,349						8,209						5,002						Total shareholders' equity	8,618						8,526						8,349
Total liabilities and shareholders' equity	Total liabilities and shareholders' equity	$	85,401					$	83,809					$	43,552					Total liabilities and shareholders' equity	$	88,587					$	89,025					$	85,401

Net earnings assets / Net interest income (TE) / Net interest spread	Net earnings assets / Net interest income (TE) / Net interest spread	$	26,506	$	511	2.52	%	$	25,068	$	525	2.59	%	$	9,819	$	305	2.89	%	Net earnings assets / Net interest income (TE) / Net interest spread	$	31,725	$	482	2.27	%	$	31,763	$	502	2.32	%	$	26,506	$	511	2.51	%
Taxable equivalent adjustment	Taxable equivalent adjustment			(3)		0.11				(3)		0.12				(2)		0.27		Taxable equivalent adjustment			(3)		0.10				(4)		0.10				(3)		0.11
Net interest income / Net interest margin (b)	Net interest income / Net interest margin (b)			$	508	2.63	%			$	522	2.71	%			$	303	3.16	%	Net interest income / Net interest margin (b)			$	479	2.37	%			$	498	2.42	%			$	508	2.62	%

(a) ~~First quarter 2021~~Negative yield for all periods is driven by negative market rates on reverse repurchase ~~agreements~~agreements.

(b) Calculated using total net interest income adjusted for FTE assuming a statutory federal income tax rate of 21% and, where applicable, state income ~~taxes~~taxes.

First Quarter 2022 versus Fourth Quarter 2021

Net interest income of $479 million in first quarter 2022 decreased $19 million from fourth quarter 2021 driven by a $23 million reduction tied to net merger-related and PPP

loan portfolio benefits and day count, partially offset by higher investment portfolio income, non-PPP C&I loan growth, and lower funding costs.


~~FIRST HORIZON CORPORATION~~			7370			~~1Q21~~1Q22 FORM 10-Q REPORT


PART I, ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)
Table of Contents

The net interest margin of 2.37% in first quarter 2022 decreased 5 basis points from fourth quarter 2021 primarily due to lower PPP loan-related revenues, partially offset by higher investment portfolio yields, greater acquired loan accretion, and lower funding costs.

Average earning assets of $82.2 billion in first quarter 2022 decreased $314 million from fourth quarter 2021 largely due to a $600 million decrease in loans and leases, driven by a $1.0 billion decrease in loans to mortgage companies and a $630 million decrease in average PPP loans, and a $163 million decrease in interest-bearing cash. These decreases were partially offset by a $399 million increase in average investment securities.

First Quarter 2022 versus First Quarter 2021

Net interest income of $479 million decreased $29 million from first quarter 2021 driven by lower average loan and lease balances and the effect of tighter loan spreads.

First quarter 2022 net interest margin decreased 25 basis points from 2.62% in first quarter 2021, driven by the impact of lower interest earning asset yields from a decline in loan origination spreads and greater levels of excess cash.

Despite the decrease in average loans and leases, total average earning assets increased $3.5 billion in first quarter 2022 from $78.7 billion in the first quarter 2021 from higher levels of interest-bearing cash and investment securities.

Provision for Credit Losses

The provision for credit losses includes the provision for loan and lease losses and the provision for unfunded lending commitments. The provision for credit losses is the expense necessary to maintain the ALLL and the accrual for unfunded lending commitments at levels appropriate to absorb management’s estimate of credit losses expected over the life of the loan and lease portfolio and the portfolio of unfunded loan commitments.

~~The~~

For the first quarter 2022, provision for credit losses was a benefit of ~~$45~~$40 million compared to ~~expense~~a benefit of $1$65 million in fourth quarter

~~2020,~~ 2021, largely reflecting ~~continued improvement in~~ the ~~overall macroeconomic outlook~~decreased impact of COVID-19, tempered by inflationary pressures and a ~~reduction in consumer loans.~~slower economic growth forecast. The ~~provision for credit losses~~first quarter 2022 benefit decreased ~~$199 million~~modestly from first quarter ~~2020 primarily from an improvement in the overall macroeconomic outlook.~~2021.

For additional information about general asset quality trends, refer to the Asset Quality section in this MD&A.

Noninterest Income

The following table presents the significant components of noninterest income for each of the periods presented:

Table ~~3 - Noninterest Income~~I.2.3

Three Months Ended 1Q21 vs. 1Q20 1Q21 vs. 4Q20
(Dollars in millions) March 31, 2021 December 31, 2020 March 31, 2020 $ Change % Change $ Change % Change
Noninterest income:
Fixed income $ 126 $ 104 $ 96 $ 30 31 % $ 22 21 %
Mortgage banking and title income 53 57 2 51 NM (4) (7) %
Deposit transactions and cash management 42 45 30 12 40 % (3) (7) %
Brokerage, management fees and commissions 20 19 16 4 25 % 1 5 %
Trust services and investment management 12 12 7 5 71 % — — %
Bankcard income 11 12 7 4 57 % (1) (8) %
Other income 34 39 16 18 NM (5) (13) %
Total noninterest income $ 298 $ 288 $ 174 $ 124 71 % $ 10 3 %
NONINTEREST INCOME

~~Certain previously reported amounts have been reclassified to agree with current presentation.~~

~~NM – Not meaningful~~

Th~~e following table summarizes FHN’s fixed income noninterest income for each of the periods presented:~~

~~Table 4—Fixed Income~~


	Three Months Ended						1Q22 vs. 4Q21				1Q22 vs. 1Q21
(Dollars in millions)	March 31, 2022		December 31, 2021		March 31, 2021		$ Change		% Change		$ Change		% Change
Noninterest income:
Fixed income	$	73	$	82	$	126	$	(9)	(11)	%	$	(53)	(42)	%
Deposit transactions and cash management	44		45		42		(1)		(2)		2		5
Brokerage, management fees and commissions	24		23		20		1		4		4		20
Mortgage banking and title income	22		28		53		(6)		(21)		(31)		(58)
Card and digital banking fees	20		19		17		1		5		3		18
Trust services and investment management	13		12		12		1		8		1		8
Other service charges and fees	13		11		10		2		18		3		30
Securities gains (losses), net	6		1		—		5		500		6		100


Other income	14		26		18		(12)		(46)		(4)		(22)
Total noninterest income	$	229	$	247	$	298	$	(18)	(7)	%	$	(69)	(23)	%

First Quarter 2022 versus Fourth Quarter 2021

Compared to fourth quarter 2021, noninterest income decreased $18 million, or 7%, largely reflecting lower fixed income and mortgage banking and title fees offset by an

increase in securities gains. Noninterest income results were also impacted by lower gains on sales of premises and equipment and SBA servicing income.


~~FIRST HORIZON CORPORATION~~			7471			~~1Q21~~1Q22 FORM 10-Q REPORT


PART I, ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)
Table of Contents

~~First Quarter 2021 versus Fourth Quarter 2020~~

~~Compared to fourth quarter 2020, noninterest income increased $10 million, or 3%, primarily reflecting strong fixed income.~~ Fixed income ~~increased $22~~of $73 million or 21%, driven by continued elevated liquidity and weak loan demand among fixed income customers, as well as interest rate volatility.This increase was partially offset by decreases in mortgage banking and title income, deposit transaction and cash management fees, deferred compensation and derivative sales.

~~First Quarter 2021 versus First Quarter 2020~~

~~Noninterest income of $298~~decreased $9 million, ~~for first quarter~~ ~~2021,~~ ~~increased~~ ~~$124 million, or 71%, compared to~~

~~first quarter~~ ~~2020, primarily~~ driven by the impact of higher long-term rates and macroeconomic uncertainty. Fixed income average daily revenue of $1.0 million compared with $1.1 million in fourth quarter 2021.

Mortgage banking and title income of $22 million decreased $6 million driven by lower origination volume given the impact of higher long-term rates, seasonality, and a continued mix shift toward portfolio loans.

First Quarter 2022 versus First Quarter ~~IBKC merger as well as strong~~2021

Noninterest income of $229 million for first quarter 2022 decreased $69 million, or 23%, compared to first quarter

2021, primarily reflecting lower fixed income ~~revenue during the quarter.~~ and mortgage banking and title fees.

Fixed income ~~increased $30~~fees of $73 million or ~~31%, fr~~omdecreased $53 million from first quarter ~~2020.~~2021. Fixed income product revenue ~~of $115~~decreased $54 million, reflecting less favorable market conditions, while revenue from other products increased ~~47%,~~$1 million, largely driven by ~~favorable market conditions including market volatility and increased depository liquidity. Revenue from other products of $11 million decreased 39%, primarily driven by lower~~higher fees from derivative sales.

Mortgage banking and ~~loan sales.~~

title income of $22 million decreased $31 million driven by a shift in origination mix toward portfolio loans as well as lower spreads on sales of mortgage loans.

Noninterest Expense

The following ~~table presents~~tables present the significant components of noninterest expense for each of the periods presented:

Table ~~5 - Noninterest Expense~~I.2.4

Three Months Ended 1Q21 vs. 1Q20 1Q21 vs. 4Q20
(Dollars in millions) March 31, 2021 December 31, 2020 March 31, 2020 $ Change % Change $ Change % Change
Noninterest expense:
Personnel expense $ 318 $ 319 $ 183 $ 135 74 % $ (1) NM
Net occupancy expense 37 36 20 17 85 % 1 3 %
Computer software 28 27 16 12 75 % 1 4 %
Legal and professional fees 14 19 9 5 56 % (5) (26) %
Operations services 16 17 12 4 33 % (1) (6) %
Equipment expense 11 13 9 2 22 % (2) (15) %
Amortization of intangible assets 14 15 5 9 NM (1) (7) %
Other expense 106 62 48 58 NM 44 71 %
Total noninterest expense $ 544 $ 508 $ 302 $ 242 80 % $ 36 7 %
NONINTEREST EXPENSE

~~Certain previously reported amounts have been reclassified to agree with current presentation.~~

~~NM – Not meaningful~~


	Three Months Ended						1Q22 vs. 4Q21				1Q22 vs. 1Q21
(Dollars in millions)	March 31, 2022		December 31, 2021		March 31, 2021		$ Change		% Change		$ Change		% Change
Noninterest expense:
Personnel expense	$	280	$	290	$	318	$	(10)	(3)	%	$	(38)	(12)	%
Net occupancy expense	32		34		37		(2)		(6)		(5)		(14)
Computer software	29		29		28		—		—		1		4
Legal and professional fees	23		17		14		6		35		9		64
Operations services	20		21		16		(1)		(5)		4		25
Contract employment and outsourcing	19		20		14		(1)		(5)		5		36
Amortization of intangible assets	13		14		14		(1)		(7)		(1)		(7)
Equipment expense	11		11		11		—		—		—		—
Advertising and public relations	11		14		4		(3)		(21)		7		175
Communications and delivery	10		9		—		1		11		1		11

Other expense	45		69		79		(24)		(35)		(34)		(43)
Total noninterest expense	$	493	$	528	$	544	$	(35)	(7)	%	$	(51)	(9)	%

First Quarter ~~2021~~2022 versus Fourth Quarter ~~2020~~2021

~~Compared to fourth quarter 2020, noninterest~~Noninterest expense ~~increased $36~~of $493 million decreased $35 million, or 7%, ~~driven by a $36 million increase~~largely reflecting decreases in ~~merger~~other expense and ~~acquisition~~personnel expense. The decline in other expense was primarily related ~~expense largely tied~~ to ~~IBKC merger integration costs. First quarter 2021 also included~~ $10 million in derivative valuation adjustments ~~related to~~on prior Visa ~~Class-B~~Class B share ~~sales.~~

~~First Quarter~~sales in the fourth quarter of 2021 ~~versus First Quarter 2020~~

~~Total noninterest expense of~~ ~~$544 million~~ ~~increased $242 million, or 80%,~~ ~~from first quarter 2020 primarily attributable to~~ ~~the impact of the IBKC merger~~ and ~~Truist branch acquisition. In addition to the impact of~~

~~the merger~~lower fraud and ~~branch acquisition, the increase~~contract termination losses. The decline in personnel ~~expense~~ reflects an increase in revenue-based compensation due to increases in fixed income and mortgage banking and an increase in deferred compensation expense driven by equity market valuations. Other expense in first quarter 2021 included $33 million in asset impairments related to IBKC merger integration efforts. Total merger and acquisition expense was ~~$70 million in first quarter 2021 compared~~largely attributable to $6 million in the fourth quarter of 2021 from litigation tied to a company that was fully divested over ten years ago.

First Quarter 2022 versus First Quarter 2021

Noninterest expense of $493 million decreased $51 million, or 9%, from first quarter ~~2020.~~2021 largely reflecting a $33 million decline in merger and acquisition expense. Results also reflect a decrease in personnel expense from lower deferred compensation and incentive-based compensation costs.


			72			1Q22 FORM 10-Q REPORT


PART I, ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)
Table of Contents

Income Taxes

FHN recorded income tax expense of ~~$71~~$57 million inin first quarter ~~2021,~~2022 compared to ~~$56~~$53 million in fourth quarter ~~2020~~2021 and $5$71 million in first quarter ~~2020.~~ 2021.

The effective tax rate was approximately ~~23.2%~~22.4%, ~~18.7%~~18.6%,


~~FIRST HORIZON CORPORATION~~			75			~~1Q21 FORM 10-Q REPORT~~

and ~~22.4%~~23.2% for the three months ended March 31, ~~2020,~~2022, December 31, ~~2020~~2021 and March 31, ~~2020,~~2021, respectively.

FHN’s effective tax rate is favorably affected by recurring items such as bank-owned life insurance, tax-exempt income, and tax credits and other tax benefits from tax credit investments. The effective rate is unfavorably affected by the non-deductibility of ~~a portion of FHN's~~portions of: FDIC premium, executive compensation and merger expenses. FHN’s effective tax rate also may be affected by items that may occur in any given period but are not consistent from period to period, such as changes in unrecognized tax benefits. The rate also may be affected by items resulting from business combinations.

A deferred tax asset or deferred tax liability is recognized for the tax consequences of temporary differences between the financial statement carrying amounts and

the tax bases of existing assets and

liabilities. The tax consequence is calculated by applying current enacted statutory tax rates ~~applicable to future years,~~ to these temporary ~~differences.~~differences in future years. As of March 31, ~~2021,~~2022, FHN’s gross DTA and gross DTL were $~~472~~554 million and $~~448~~403 million, respectively, resulting in a net DTA of ~~$24~~$151 million at March 31, ~~2021,~~2022, compared with a net DTA of ~~less than $1~~$52 million at December 31, ~~2020.~~2021.

As of March 31, ~~2021,~~2022, FHN had deferred tax asset balances related to federal and state income tax carryforwards of ~~$39~~$34 million and $9$2 million, respectively, which will expire at various dates.

Based on current analysis, FHN believes that ~~it will be able~~its ability to realize the ~~value of its~~ DTA ~~and that no valuation allowance~~ is ~~needed.~~more likely than not. FHN monitors its DTA and the need for a valuation allowance on a quarterly basis. A significant adverse change in FHN’s taxable earnings outlook could result in the need for a valuation allowance.

Business Segment Results

~~During fourth quarter~~ ~~2020, FHN reorganized its internal management structure and, accordingly, its segment reporting structure. Historically,~~ FHN's primary business segments were Regional Banking, Fixed Income, Corporate, and Non-strategic. On July 1, 2020, FHN and IBKC closed their merger of equals transaction. This transaction prompted organizational changes to better integrate and execute the combined Company's strategic priorities across all lines of businesses. As a result, FHN revised its reportable segments to include Regional Banking, Specialty Banking and Corporate. ~~Segment results for the first quarter of 2020 have been recast to adjust for the realignment of the segment reporting structure.~~ See Note 1312 - Business Segment Information for additional disclosures related to FHN's ~~operating~~ segments.

Regional Banking

The Regional Banking segment generated pre-tax income of ~~$286~~$259 million for first quarter 2022, a decrease of $56 million compared to fourth quarter 2021, largely driven by a $30 million decline in provision for credit losses benefit and a $21 million decline in net interest income. The lower provision benefit largely reflects the decreased impact of COVID-19, tempered by inflationary pressures and a slower economic growth forecast. The decline in net interest income is reflective of a reduction in net merger-related and PPP benefits and day count.

Pre-tax income for first quarter 2022 decreased $30 million compared to $289 million for first quarter 2021 largely driven by a $40 million increase in noninterest expense. Noninterest expense results reflect increases in personnel expense and other losses.

Specialty Banking

Pre-tax income in the Specialty Banking segment of $113 million for first quarter 2022 decreased $31 million compared to ~~$231~~fourth quarter 2021, largely driven by lower revenue. Net interest income of $141 million decreased $11 million from fourth quarter 2021. Fixed income of $73 million decreased $9 million, driven by the impact of higher long-term rates and macroeconomic uncertainty. Mortgage banking and title income of $22 million

decreased $6 million driven by lower origination volume given the impact of higher long-term rates, seasonality, and a continued mix shift toward portfolio loans.

Pre-tax income of $113 million in the Specialty Banking segment decreased $82 million for first quarter 2022 compared to first quarter 2021 largely driven by lower revenue partially offset by lower noninterest expense. The decline in revenue was primarily attributable to declines in fixed income and mortgage banking and title fees.

Corporate

Pre-tax loss for the Corporate segment was $117 million for first quarter 2022 compared to $177 million for fourth quarter ~~2020~~2021, largely reflecting a $44 million decrease in noninterest expense. Merger and ~~pre-tax~~acquisition-related expenses were relatively consistent with the prior quarter.

Pre-tax loss ~~of $4~~in the Corporate segment decreased $60 million compared to $177 million for first quarter ~~2020. The increase in first quarter~~ 2021, ~~compared to fourth quarter 2020 was primarily driven by~~largely the result of a $73 million decrease in noninterest expense ~~and~~tied to lower provision for credit losses reflecting continued improvement in the overall macroeconomic outlook and a reduction in consumer loans. The increase for the first quarter 2021 compared to first quarter 2020 ~~reflected an increase in revenue offset by an increase in noninterest expense resulting from the IBKC~~ merger and a

~~decrease in the provision for credit losses resulting from improvement in the macroeconomic outlook.~~

~~Specialty Banking~~

~~The Specialty Banking segment generated pre-tax income~~acquisition-related expenses of ~~$197 million for first quarter~~ ~~2021~~ ~~compared to $194 million for fourth quarter 2020 and $48 million for first quarter~~ ~~2020. First quarter 2021 results compared to fourth quarter 2020 included an increase in noninterest income and~~$33 million. Results also reflect lower ~~provision for credit losses partially offset by lower net interest income and higher noninterest expense. The increase for the first quarter 2021 compared to first quarter 2020 was~~ ~~driven by an increase in revenue offset by an increase in noninterest~~deferred compensation expense ~~resulting from the IBKC merger and a decrease in the provision for credit losses resulting from improvement in the macroeconomic outlook.~~

~~Corporate~~

~~The Corporate segment generated pre-tax loss of $176 million for first quarter~~ ~~2021~~ ~~compared to $124 million for fourth quarter 2020 and $23 million for first quarter~~ 2020. The increase in pre-tax loss for first quarter 2021 compared to first quarter 2020 reflected an increase in noninterest expense primarily from a $64 million increase in merger and integration-related costs and the impact of ~~the IBKC merger and a decrease~~derivative valuation adjustments on prior Visa Class-B share sales in ~~net interest income resulting from the impact of funds transfer pricing, partially offset by an increase in noninterest income primarily resulting from an increase in~~ ~~deferred compensation income~~first quarter 2021.


~~FIRST HORIZON CORPORATION~~			7673			~~1Q21~~1Q22 FORM 10-Q REPORT

~~driven by equity market valuations relative to the prior year.~~

~~Financial Condition~~PART I, ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)

Table of Contents

Analysis of Financial Condition

Total period-end assets ~~were $87.5~~were $88.7 billion atas of March 31, ~~2021~~2022 compared to ~~$84.2~~$89.1 billion at December 31, ~~2020. Asset growth~~2021. The decrease in total assets during ~~first quarter 2021~~2022 was driven by ana $1.3 billion decrease in cash and due from banks from lower customer deposits, offset primarily by a $524 million increase in ~~cash from deposit growth~~investment securities and ~~by loan growth, primarily C&I~~a $153 million increase in loans ~~from PPP loan originations.~~and leases.

Earning assets consist of loans and leases, loans held for sale, investment securities, and other earning assets, such as trading securities and interest-bearing deposits with banks. A detailed discussion of the major components of earning assets is provided in the following sections.

Loans and Leases

Period-end loans and leases increased ~~$368~~$153 million ~~or 1%~~ to ~~$58.6~~$55.0 billion as of March 31, ~~2021~~2022 from ~~$58.2~~$54.9 billion on December 31, ~~2020,~~2021, driven by a ~~$1.0 billion~~$108 million increase in commercial loans ~~primarily tied to PPP loans, offset~~and leases driven by CRE loan growth and a $45 million increase in consumer loans. Total loan growth was tempered by a ~~$674~~$397 million decrease in ~~consumer~~PPP loans. A~~verage~~Average loans and ~~leas~~esleases decreased to $54.1 billion

in first quarter 2022 compared to $54.7 billion in fourth quarter 2021 and $58.2 billion in first quarter 2021 ~~compared to $59.8 billion in fourth quarter 2020 and increased from $30.5 billion in first quarter 2020~~ primarily from ~~acquired~~a decline in PPP loans ~~during third quarter 2020.~~and credit card and other non-real estate consumer loans.

The following table provides detail regarding FHN's loans and leases as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021.

Table ~~6—Loans and Leases~~I.2.5

LOANS & LEASES


		As of March 31, 2021				As of December 31, 2020							As of March 31, 2022				As of December 31, 2021
(Dollars in millions)	(Dollars in millions)	Amount		Percent of total		Amount		Percent of total		Growth Rate		(Dollars in millions)	Amount		Percent of total		Amount		Percent of total		Growth Rate
Commercial:	Commercial:											Commercial:
Commercial, financial, and industrial (a)	Commercial, financial, and industrial (a)	$	33,951	58	%	$	33,104	57	%	3	%	Commercial, financial, and industrial (a)	$	30,798	56	%	$	31,068	57	%	(1)	%
Commercial real estate	Commercial real estate	12,470		21		12,275		21		2		Commercial real estate	12,487		23		12,109		22		3
Total commercial	Total commercial	46,421		79		45,379		78		2		Total commercial	43,285		79		43,177		79		—
Consumer:	Consumer:											Consumer:
Consumer real estate	Consumer real estate	11,053		19		11,725		20		(6)		Consumer real estate	10,874		20		10,772		20		1
Credit card and other	Credit card and other	1,126		2		1,128		2		—		Credit card and other	853		1		910		1		(6)
Total consumer	Total consumer	12,179		21		12,853		22		(5)		Total consumer	11,727		21		11,682		21		—
Total loans and leases	Total loans and leases	$	58,600	100	%	$	58,232	100	%	1	%	Total loans and leases	$	55,012	100	%	$	54,859	100	%	—	%

(a)Includes equipment financing loans and leases.

C&I loans are ~~the~~the largest component of the loan portfolio, ~~comprising 58%~~comprising 56% of total loans at the end of the first quarter ~~2021~~2022 and 57% at year-end ~~2020~~.2021. C&I ~~loans increased 3%~~loans decreased 1% from December 31, ~~2020,~~2021, largely ~~driven~~driven by a decrease in PPP ~~lending and~~ ~~higher balances within Specialty Banking, primarily from mortgage warehouse lending and growth in both the accommodation and food services and healthcare industries.~~loans. Commercial real estate loans increased ~~2% to $12.5 billion~~$378 million in first ~~quarter~~ ~~2021~~quarter 2022 driven by growth in both Regional Banking and ~~Corporate CRE~~Specialty Banking loans.

~~Total co~~Consumer loans ~~decreased 5%~~of $11.7 billion increased $45 million from ~~2020 to $12.2 billion as of March 31,~~year-end 2021, largely driven by ~~paydowns~~growth in real estate installment loans, ~~and home~~

~~equity lines of credit~~primarily within the Regional Banking segment.

Loans Held for Sale

In 2020, FHN obtained IBKC's mortgage banking operations which includes origination and servicing of residential first lien ~~mortgage~~mortgages that conform to standards

established by GSEs that are major investors in U.S. home mortgages but can also consist of junior lien and jumbo loans secured by residential property. These loans are primarily ~~fixed rate single-family residential mortgage loans originated by IBKC and committed~~sold to ~~be sold in~~private companies that are unaffiliated with the ~~secondary market.~~ GSEs on a servicing-released basis. For further detail, see Note 5 - Mortgage Banking Activity.

The legacy FHN loans HFS ~~portfolio~~portfolio consists of small business, other consumer loans, ~~the~~ mortgage warehouse, USDA, student, and home equity loans.

On March 31, ~~2021~~2022 and December 31, ~~2020~~2021, ~~loans~~loans HFS ~~were $811~~ ~~million and~~were $1.0 billion reand $1.2 billion, respectively. Held-for-sale consumer mortgage loans secured by residential real estate in process of foreclosure totaled $5 million at March 31, 2022 and $2 million at December 31, 2021~~spectively. The~~ .

~~decrease in loans HFS was primarily driven by a~~


~~FIRST HORIZON CORPORATION~~			7774			~~1Q21~~1Q22 FORM 10-Q REPORT

seasonal slowdown in mortgage volume, as well as a reduction in refinance activity impacted by a recent rise in mortgage interest rates. Held-for-sale consumer mortgage loans secured by residential real estate in process of foreclosure totaled $2 million at both March 31, 2021 and December 31, 2020.


PART I, ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)
Table of Contents

~~ASSET QUALITY~~

Asset Quality

Loan and Lease Portfolio Composition

FHN groups its loans into portfolio segments based on internal classifications reflecting the manner in which the ALLL is established and how credit risk is measured, monitored, and reported. From time to time, and if conditions are such that certain subsegments are uniquely affected by economic or market conditions or are experiencing greater deterioration than other components of the loan portfolio, management may determine the ALLL at a more granular level. Commercial loans and leases are composed of C&I loans and leases and CRE loans. Consumer loans are composed of consumer real ~~estate~~estate loans and credit card and other loans. FHN has a concentration of residential real estate loans ~~(19%~~ (20% of total ~~loans)~~loans at both March 31, 2022 and

December 31, 2021). I~~ndustry~~Industry concentrations are discussed ~~under~~under the ~~heading~~ C&Iheading below.

Credit underwriting guidelines are outlined in Item 7 of FHN’s Annual Report on Form 10-K, as amended, for the year ended December 31, ~~2020 in the Loan Portfolio Composition discussion~~2021 in the Asset Quality Section within the Analysis of Financial Condition discussion.

FHN’s credit underwriting guidelines and loan product offerings as of March 31, ~~2021~~2022 are generally consistent with those reported and disclosed in FHN’s Form 10-K, as amended, for the year ended December 31, ~~2020.~~2021.

Commercial Loan and Lease Portfolios

C&I

The C&I portfolio totaled ~~$34.0 billion~~ $30.8 billion as of March 31, ~~2021~~2022 and ~~$33.1~~$31.1 billion as of December 31, ~~2020~~2021 and is comprised of loans and leases used for general business purposes. Products offered in the C&I portfolio include term loan financing of owner-occupied real estate and fixed assets, PPP loans, direct financing and sales-type leases, working capital lines of credit, and trade credit enhancement through letters of cr~~edit.~~credit.

The decrease in C&I loans from December 31, 2021 was driven by a $396 million decrease in PPP loans. Excluding PPP loans, C&I loan growth was $126 million. The largest geographical concentrations of balances in the C&I

portfolio as of March 31, ~~2021~~2022 were in Tennessee (21%), Florida (12%), Texas ~~(9%), Louisiana (8%~~(10%), North Carolina ~~(8%~~(7%), Louisiana (7%), California (7%), and Georgia (5%). No other state represented more than 5% of the portfolio.

The following table provides the ~~composition~~composition of the C&I portfolio by industry as of March 31, ~~2021,~~2022, and December 31, ~~2020.~~2021. For purposes of this disclosure, industries are determined based on the North American Industry Classification System (NAICS) industry codes used by Federal statistical agencies in classifying business establishments for the collection, analysis, and publication of statistical data related to the U.S. business economy.

Table ~~7 —~~ I.2.6

C&I ~~Loan Portfolio by Industry~~PORTFOLIO BY INDUSTRY


		March 31, 2021				December 31, 2020					March 31, 2022				December 31, 2021
(Dollars in millions)	(Dollars in millions)	Amount		Percent		Amount		Percent		(Dollars in millions)	Amount		Percent		Amount		Percent
Industry:	Industry:									Industry:
Loans to mortgage companies	Loans to mortgage companies	$	5,530	16	%	$	5,404	16	%	Loans to mortgage companies	$	3,895	13	%	$	4,518	15	%
Finance and insurance	Finance and insurance	3,113		9		3,130		10		Finance and insurance	3,580		11		3,483		11
Real estate rental and leasing (a)										Real estate rental and leasing (a)	2,704		9		2,771		9
Health care and social assistance	Health care and social assistance	2,832		8		2,689		8		Health care and social assistance	2,371		8		2,413		8

Accommodation and food service	Accommodation and food service	2,480		7		2,303		7		Accommodation and food service	2,144		7		2,221		7
Real estate rental and leasing (a)		2,377		7		2,365		7

Manufacturing										Manufacturing	2,064		7		1,950		6
Wholesale trade	Wholesale trade	2,133		6		2,079		6		Wholesale trade	1,956		6		1,845		6
Manufacturing		1,968		6		1,907		6

Retail trade										Retail trade	1,603		5		1,532		5
Energy	Energy	1,637		5		1,686		5		Energy	1,335		4		1,325		4
Retail trade		1,566		5		1,531		5
Professional, scientific, and technical		1,567		5		1,457		4
Other (construction, transportation, etc.) (b)		8,748		26		8,553		26

Other (professional, construction, transportation, etc.) (b)										Other (professional, construction, transportation, etc.) (b)	9,146		30		9,010		29
Total C&I loan portfolio	Total C&I loan portfolio	$	33,951	100	%	$	33,104	100	%	Total C&I loan portfolio	$	30,798	100	%	$	31,068	100	%

(a)Leasing, rental of real estate, equipment, and goods.

(b)Industries in this category each comprise less than 5% ~~for 2021~~.as of March 31, 2022.


~~FIRST HORIZON CORPORATION~~			7875			~~1Q21~~1Q22 FORM 10-Q REPORT


PART I, ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)
Table of Contents

Industry Concentrations

Loan concentrations exist when there are loans to numerous borrowers engaged in similar activities that would cause them to be similarly impacted by economic or other conditions. Loans to mortgage companies and ~~borrowers~~borrowers in the finance and insurance industry were ~~25%~~24% and 26% of FHN’s C&I loan portfolio as of March 31, 2022 and December 31, 2021, respectively, and as a result could be affected by items that uniquely impact the financial services in~~dustry.~~industry. As of March 31, ~~2021,~~2022, FHN did not have any other concentrations of C&I loans in any single industry of 10% or more of total loans.

Loans to Mortgage Companies

Loans to mortgage companies were ~~16%~~13% of thethe C&I portfolio as of March 31, ~~2021~~2022 and 15% as of December 31, ~~2020.~~2021. This portfolio generally fluctuates with mortgage rates and seasonal factors and ~~includes~~includes commercial lines of credit to qualified mortgage companies primarily for the temporary warehousing of eligible mortgage loans prior to the borrower’s sale of those mortgage loans to third party investors. Generally, new loan originations to mortgage lenders increases when there is a decline in mortgage rates and decreases when rates rise. In periods of economic uncertainty, this trend may not occur even if interest rates are declining. In first quarter ~~2021, 33%~~2022, 58% of the loan originations were home purchases and ~~67%~~42% were refinance transactions.

Finance and Insurance

The finance and insurance component ~~represents 9%~~represented 11% of the C&I portfolio as of both March 31, ~~2021 compared to 10% as of~~2022 and December 31, ~~2020,~~2021, and includes TRUPs (i.e., long-term unsecured loans to bank and insurance-related businesses), loans to bank holding companies, and asset-based lending to consumer finance companies. As of March 31, ~~2021,~~2022, asset-based lending to ~~consumer~~consumer finance companies represents approximately ~~$1.2~~$1.5 billion of the finance and insurance component.

TRUPs lending was originally extended as a form of “bridge” financing to participants in the pooled trust preferred securitization program offered primarily to smaller banking (generally less than $15 billion in total assets) and insurance institutions through FHN’s fixed income business. Origination of TRUPs lending ceased in early 2008. Individual TRUPs are re-graded at least quarterly as part of FHN’s commercial loan review process. The terms of these loans generally include a scheduled 30 year balloon payoff and include an option to defer interest for up to 20 consecutive quarters. ~~As of March 31, 2021, the unpaid principal balance (UPB) of trust preferred loans totaled $228 million. Including an amortizing discount of $18 million, total reserves (ALLL plus the~~

~~amortizing~~ ~~discount) for TRUPs and other bank-related loans were $28 million, or 12% of outstanding UPB.~~ ~~As of March 31, 2021, TRUPs loans included $7 million of loans on nonaccrual, which represented a single loan relationship.~~

Paycheck Protection Program

In 2020, Congress created the Paycheck Protection Program (PPP). in response to the economic disruption associated with the COVID-19 pandemic. Under the PPP,

qualifying businesses may receive loans from private lenders, such as FHN, that are fully guaranteed by the Small Business Administration. These loans potentially are partly or fully forgivable, depending upon the borrower’s use of the funds and maintenance of employment levels. To the extent forgiven, the borrower is relieved from payment while the lender is still paid from the program. ~~Congress made revisions to the PPP during first quarter 2021, and may make further revisions in the future.~~

AtThe C&I portfolio as of March 31, ~~2021, FHN had 44,717 of~~2022 includes 5,184 loans made under the PPP ~~loans~~ with an aggregate principal balance of ~~$5.1 billion. For these loans, FHN anticipates being paid net lender fees of approximately $81~~$642 million, ~~in relation~~which are fully government guaranteed with the SBA. Due to the government guarantee and forgiveness provisions, PPP loans ~~held at March 31, 2021.~~

~~Because PPP loans carry a full SBA guarantee, they do not~~are considered to have ~~any~~no credit risk and ~~will~~do not affect the amount of provision and ALLL recorded. As a result, no ALLL is recorded for PPP loans as of March 31, ~~2021,~~2022, and FHN has assigned a risk weight of zero to PPP loans for regulatory capital purposes.

For these loans, there are remaining net lender fees of approximately $7 million to be paid to FHN as of March 31, 2022. During 2022, FHN continues to work with its clients that have applied for and received PPP loan forgiveness. Through March 31, 2022, approximately $5 billion of the original $6 billion in PPP loans originated by FHN and IBERIABANK prior to acquisition have been forgiven by the SBA.

Commercial Real Estate

The CRE portfolio ~~totaled~~totaled $12.5 ~~billion and $12.3~~ billion as of March 31, ~~2021~~2022 and $12.1 billion as of December 31, ~~2020, respectively~~.2021. The CRE portfolio reflects financings for both commercial construction and nonconstruction loans. The ~~largest~~largest geographical ~~concentrations~~concentrations of CRE loan balances as of March 31, ~~2021~~2022 were in Florida ~~(28%), Louisiana (11%), Texas (11%~~(26%), North Carolina (11%), ~~Tennessee (9%~~Texas (11%), Louisiana (10%), Georgia (10%), and ~~Georgia~~Tennessee (9%). No other state represented more than 5% of the portfolio. This por ~~portfolio~~tfolio contains loans, draws on lines, and letters of credit to commercial real estate developers for the construction and ~~mini-permanent~~mini-permanent financing of income-producing real estate. ~~Subcategories~~Subcategories of the CRE portfolio consist of multi-family ~~(27%~~(26%), office ~~(22%~~(23%), retail ~~(18%~~(19%), industrial ~~(11%~~(12%), hospitality (11%), land/land development (2%), and other ~~(9%~~(7%).


~~FIRST HORIZON CORPORATION~~			79			~~1Q21 FORM 10-Q REPORT~~

Consumer Loan Portfolios

Consumer Real Estate

The consumer real estate ~~portfolio~~portfolio totaled ~~$11.1 billion~~ $10.9 billion and ~~$11.7~~$10.8 billion as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, , and is ~~primarily~~primarily composed of home equity lines and installment loans. The largest geographical ~~concentr~~co~~ations~~ncentrations of balances as of March 31, ~~2021,~~2022 were in Florida ~~(32%~~(31%), Tennessee ~~(25%~~(23%), Louisiana ~~(10%~~(9%), North Carolina (8%), Texas (7%), and ~~Texas~~New York (5%). No other state represented more than 5% of the portfolio.

As of March 31, ~~2021,~~2022, approximately ~~85%~~88% of the consumer real estate portfolio was in a first lien position. At origination, the weighted average FICO score of this portfolio was ~~753~~755 and the refreshed FICO scores also averaged ~~765~~755 as of March 31, ~~2021,~~2022, no significant change from FICO scores of ~~753~~755 and ~~763,~~754, respectively, as of December 31, ~~2020.~~2021. Generally, performance of this portfolio is affected by life events that affect borrowers’ finances, the level of unemployment, and home prices.


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PART I, ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)
Table of Contents

As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, FHN had held-for-investment consumer mortgage loans secured by real estate that were in the process of foreclosure totaling ~~$34~~$26 million and ~~$36~~$20 million, respectively.

HELOCs comprised ~~$2.3 billion~~$1.9 billion and $2.0 billion of the consumer real estate portfolio as of March 31, ~~2021.~~2022 and December 31, 2021, respectively. FHN’s HELOCs typically have a 5 or 10 year draw period followed by a 10 or 20 year repayment period, respectively. During the draw period, a borrower is able to draw on the line and is only required to make interest payments. The line is frozen if a borrower becomes past due on payments. Once the draw period has ended, the line is closed and the borrower is required to make both principal and interest payments monthly until the loan matures. The principal payment generally is fully amortizing, but payment amounts will adjust when variable rates reset to reflect changes in the prime rate.

As of ~~both~~ March 31, ~~2021 and~~ ~~December 31, 2020~~,2022, approximately ~~86%~~89% of FHN's HELOCs were in the draw ~~period.~~period compared to 88% at December 31, 2021. It is expected that ~~$438~~$432 million, or ~~22%~~25%, of HELOCs currently in the draw period will enter the repayment period during the next 60 months, based on current terms. Generally, delinquencies for HELOCs that have entered the repayment period are initially higher than HELOCs still in the draw period because of the increased minimum payment requirement. However, over time, performance of these loans usually begins to stabilize. HELOCs ~~are monitored closely for those~~ nearing the end of the draw period.d are closely monitored.

The following table presents HELOCs currently in the draw period, ~~and expected timing of conversion to~~broken down by months remaining in the ~~repayment~~draw period.

Table ~~8—HELOC Draw To Repayment Schedule~~I.2.7

HELOC DRAW TO REPAYMENT SCHEDULE


		March 31, 2021				December 31, 2020					March 31, 2022				December 31, 2021
(Dollars in millions)	(Dollars in millions)	Repayment Amount		Percent		Repayment Amount		Percent		(Dollars in millions)	Repayment Amount		Percent		Repayment Amount		Percent
Months remaining in draw period:	Months remaining in draw period:									Months remaining in draw period:
0-12	0-12	$	65	3	%	$	73	4	%	0-12	$	38	2	%	$	43	2	%
13-24	13-24	58		3		66		3		13-24	41		2		42		2
25-36	25-36	54		3		62		3		25-36	57		3		50		3
37-48	37-48	78		4		67		3		37-48	132		8		136		8
49-60	49-60	183		9		187		8		49-60	164		10		160		9
>60	>60	1,551		78		1,662		79		>60	1,272		75		1,324		76
Total	Total	$	1,989	100	%	$	2,117	100	%	Total	$	1,704	100	%	$	1,755	100	%

Credit Card and Other

The credit card and other portfolio, which isis primarily within the Regional Banking segment, totaled ~~$1.1 billion~~ $853 million as of March 31, ~~2021~~2022 and $910 million as of December 31, 2021. This portfolio primarily ~~includes co~~consists of consumer-related~~nsumer-related~~

credits, including home equity and other personal consumer loans, c~~redit~~credit card receivables, and automobile loans. ~~There~~The $57 million decrease was no

driven by net repayments of automobile loans, consumer construction loans, and credit cards.

~~significant change in the balance of this portfolio from December 31, 2020.~~

Allowance for ~~Loan and Lease~~Credit Losses

~~Management’s policy~~The ACL is ~~to maintain the ALLL~~maintained at a level sufficient to ~~recognize current expected~~provide appropriate reserves to absorb estimated future credit losses onin accordance with GAAP. For additional information regarding the ~~amortized cost basis~~ACL, see Note 4 of ~~the loan~~this Report and ~~lease~~ "Critical Accounting Policies and Estimates" and Note 5 in FHN's 2021 Form 10-K, as amended.~~portfolio.~~

The ~~total allowance for loan and lease~~


~~FIRST HORIZON CORPORATION~~			80			~~1Q21 FORM 10-Q REPORT~~

~~losses~~ALLL decreased to ~~$914~~$622 million ~~on March 31, 2021 from $963 million on December 31, 2020. The ALLL~~ as of March 31, 2022 from $670 million as of December 31, 2021, ~~reflects the improvement~~largely

reflecting a continued decrease in the ~~economic forecast from year-end 2020. As a result,~~unfavorable impact of COVID-19 on the ~~ratio of~~macroeconomic forecast. The ALLL to total loans and leases ratio decreased 9 basis points ~~from December 31, 2020~~ to ~~1.56% on March 31, 2021.~~

1.13%. The ~~provision for loan~~ACL to total loans and ~~lease losses is the charge~~leases ratio decreased to or release of earnings necessary to maintain the ALLL at a sufficient level reflecting management’s estimate of current expected losses on the amortized cost basis of the loan and lease portfolio. Provision credit was $41 million in first quarter 2021 compared to a provision expense of $145 million in first quarter 2020. The decrease is primarily attributable to an improving economic forecast, as first quarter 2020 was negatively impacted by the economic uncertainty around the COVID-19 pandemic.

Asset quality trends may continue to be impacted by the economic uncertainty attributable to the COVID-19 pandemic. The C&I portfolio reflects a broad mix of categories with the heaviest concentration in loans to mortgage companies which carry minimal credit risk. The C&I portfolio1.25% as of March 31, ~~2021 includes $5.1 billion~~2022 from 1.34% as of loans made under the Paycheck Protection Program of the SBA. PPP loans are fully government guaranteed with the SBA. Due to the government guarantee and forgiveness provisions, PPP loans are considered to have no credit risk.December 31, 2021.

The CRE portfolio metrics may continue to be impacted by the COVID-19 pandemic due to travel and occupancy restrictions set by state and local governments affecting the hospitality and retail industries. The consumer portfolio may also continue to be impacted by the COVID-19 pandemic if consumer unemployment continues to remain elevated and clients are unable to continue making loan payments. The consumer portfolio, however, is high quality with no subprime and minimal exposure to other traditional categories of high risk lending.

~~Consolidated Net Charge-offs~~

~~Net charge-offs in first quarter~~ ~~2021~~ we~~re $8 million, an annualized charge-off percentage of 0.06% of total loans and leases, consistent with~~ ~~net charge-offs of$8 million in first quarter~~ ~~2020~~.

~~Net cha~~rge-offs in first quarter 2021 in the commercial portfolio were $11 million compared to $6 million in first quarter 2020. Net charge-offs were impacted by higher energy charge-offs in the current quarter, as well as a larger commercial portfolio from acquired loans in third quarter 2020.

~~Net recoveries in the consumer portfolio were $3 million in first quarter 2021, driven by consumer real estate recoveries in the Corporate segment, compared to $2 million in net charge-offs in first quarter 2020.~~

~~Table 9—Analysis of Allowance for Loan and Lease Losses and Charge-offs~~

(Dollars in millions)
Allowance for loan and lease losses (a) March 31, 2021 December 31, 2020 March 31, 2020
C&I $ 442 $ 453 $ 255
CRE 232 242 48
Consumer real estate 222 242 122
Credit card and other 18 26 19
Total allowance for loan and lease losses $ 914 $ 963 $ 444
Period-end loans and leases
C&I $ 33,951 $ 33,104 $ 22,124
CRE 12,470 12,275 4,640
Consumer real estate 11,053 11,725 6,119
Credit card and other 1,126 1,128 495
Total period-end loans and leases $ 58,600 $ 58,232 $ 33,378
ALLL / loans and leases % (a)
C&I 1.30 % 1.37 % 1.15 %
CRE 1.86 % 1.97 % 1.03 %


~~FIRST HORIZON CORPORATION~~			81			~~1Q21 FORM 10-Q REPORT~~

Consumer real estate 2.00 % 2.07 % 2.00 %
Credit card and other 1.63 % 2.34 % 3.91 %
Total ALLL / loans and leases % 1.56 % 1.65 % 1.33 %
Quarter-to-date net charge-offs (recoveries)
C&I $ 10 $ 31 $ 6
CRE 1 (1) —
Consumer real estate (5) (3) (1)
Credit card and other 2 2 3
Total net charge-offs $ 8 $ 29 $ 8
Average loans and leases (b)
C&I $ 33,279 $ 34,196 $ 19,470
CRE 12,424 12,400 4,422
Consumer real estate 11,400 12,030 6,134
Credit card and other 1,119 1,194 498
Total average loans and leases $ 58,222 $ 59,820 $ 30,524
Charge-off %
C&I 0.12 % 0.36 % 0.12 %
CRE 0.06 % NM — %
Consumer real estate NM NM NM
Credit card and other 0.65 % 0.68 % 2.23 %
Total charge-off % 0.06 % 0.19 % 0.10 %
ALLL / annualized net charge-offs
C&I 11.47 x 3.67 x 10.89 x
CRE 33.31 x NM NM
Consumer real estate NM NM NM
Credit card and other 2.53 x 3.23 x 1.74 x
Total ALLL / net charge-offs 28.14 x 8.41 x 13.80 x
ALLL / NPLs
C&I 3.07 x 3.15 x 2.65 x
CRE 3.45 x 4.15 x 21.75 x
Consumer real estate 1.23 x 1.33 x 1.34 x
Credit card and other 7.49 x 13.13 x 53.69 x
Total ALLL / NPLs 2.32 x 2.49 x 2.34 x

~~NM - not meaningful~~

~~(a)~~The increase in the ALLL from first quarter 2020 was primarily attributable to the allowance recorded on acquired non-PCD loans and the decline in the economic forecast attributable to the COVID-19 pandemic, while the decrease from fourth quarter 2020 was from an improvement in the overall economic forecast.

~~(b)The increase in period-end and average loans and leases from 1st quarter 2020 is primarily the result of $26.3 billion in acquired loans and leases in third quarter 2020.~~


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Consolidated Net Charge-offs

Net charge-offs in first quarter 2022 were $10 million, or an annualized 7 basis points of total loans and leases, compared to net charge-offs of $8 million, or 6 basis points of total loans and leases, in first quarter 2021.

Net charge-offs in the commercial portfolio in first quarter 2022 were $10 million and $11 million in first quarter

2021. Net recoveries in the consumer portfolio were minimal in first quarter 2022 compared to $3 million in net recoveries in first quarter 2021. The decrease in net recoveries from the prior year was attributable to higher gross credit card charge-offs and lower gross consumer real estate recoveries.

Table I.2.8

ANALYSIS OF ALLOWANCE FOR CREDIT LOSSES AND CHARGE-OFFS


(Dollars in millions)		March 31, 2022			December 31, 2021			March 31, 2021
Allowance for loan and lease losses
	C&I	$	287		$	334		$	442
	CRE	151			154			232
	Consumer real estate	164			163			222
	Credit card and other	20			19			18
	Total allowance for loan and lease losses	$	622		$	670		$	914


Reserve for remaining unfunded commitments
	C&I	$	43		$	46		$	62
	CRE	12			12			11
	Consumer real estate	9			8			8
	Credit card and other	—			—			—
	Total reserve for unfunded lending commitments	$	64		$	66		$	81

Allowance for credit losses
	C&I	$	330		$	380		$	504
	CRE	163			166			243
	Consumer real estate	173			171			230
	Credit card and other	20			19			18
	Total allowance for credit losses	$	686		$	736		$	995

Period-end loans and leases
	C&I	$	30,798		$	31,068		$	33,951
	CRE	12,487			12,109			12,470
	Consumer real estate	10,874			10,772			11,053
	Credit card and other	853			910			1,126
	Total period-end loans and leases	$	55,012		$	54,859		$	58,600

ALLL / loans and leases %
	C&I	0.93		%	1.07		%	1.30		%
	CRE	1.21			1.27			1.86
	Consumer real estate	1.51			1.51			2.00
	Credit card and other	2.31			2.14			1.63
	Total ALLL / loans and leases %	1.13		%	1.22		%	1.56		%

ACL / loans and leases %
	C&I	1.07		%	1.22		%	1.48		%
	CRE	1.31			1.37			1.95
	Consumer real estate	1.59			1.59			2.08
	Credit card and other	2.31			2.09			1.63
	Total ACL / loans and leases %	1.25		%	1.34		%	1.70		%


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Quarter-to-date net charge-offs (recoveries)
	C&I	$	10		$	1		$	10
	CRE	—			—			1
	Consumer real estate	(4)			(3)			(5)
	Credit card and other	4			3			2
	Total net charge-offs (recoveries)	$	10		$	1		$	8

Average loans and leases
	C&I	$	30,215		$	30,780		$	33,279
	CRE	12,229			12,221			12,424
	Consumer real estate	10,769			10,738			11,400
	Credit card and other	869			943			1,119
	Total average loans and leases	$	54,082		$	54,682		$	58,222

Charge-off % (annualized)
	C&I	0.13		%	0.01		%	0.12		%
	CRE	NM			NM			0.06
	Consumer real estate	NM			NM			NM
	Credit card and other	1.85			1.26			0.65
	Total charge-off %	0.07		%	0.01		%	0.06		%

ALLL / annualized net charge-offs
	C&I	713		%	7,238		%	1,147		%
	CRE	NM			NM			3,331
	Consumer real estate	NM			NM			NM
	Credit card and other	123			164			253
	Total ALLL / net charge-offs	1,595		%	17,374		%	2,814		%

NM - not meaningful

Nonperforming Assets

Nonperforming loans are loans placed on nonaccrual if it becomes evident that full collection of principal and interest is at risk, if impairment has been recognized as a partial charge-off of principal balance due to insufficient collateral value and past due status, or (on a case-by-case basis), if FHN continues to receive payments but there are other borrower-specific issues. Included in nonaccruals are loans ~~that~~for which FHN continues to receive payments, including residential real estate loans where the borrower has been discharged of personal obligation through bankruptcy. NPAs consist of nonperforming loans and OREO (excluding OREO from government insured mortgages).

Total NPAs (including NPLs HFS) increased to ~~$410~~$343 million as of March 31, ~~2021~~2022 from ~~$406~~$285 million as of

December 31, ~~2020. Despite~~2021, driven by higher nonaccrual loans in the ~~marginal increase, the~~C&I and consumer real estate portfolios. The nonperforming ~~assets~~loans and leases ratio ~~(nonperforming assets excluding NPLs HFS~~increased 10 basis points to ~~total period-end loans plus OREO) was 0.69% as of both March 31, 2021 and December 31, 2020. The ratio of the ALLL to NPLs was 2.3 times~~0.60% as of March 31, ~~2021 compared to 2.5 times as of December 31, 2020.~~2022.

Certain nonperforming loans in both the commercial and consumer portfolios are deemed collateral-dependent and are charged down to an estimate of collateral value less costs to sell. Because the estimated loss has been recognized through a partial charge-off, typically an ALLL is not recorded.


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Table ~~10—Nonperforming Assets by Loan Portfolio~~I.2.9

(Dollars in millions) March 31, 2021 December 31, 2020
Nonperforming loans and leases
C&I $ 144 $ 144
CRE 67 58
Consumer real estate 180 182
Credit card and other 3 2
Total nonperforming loans and leases (a) $ 394 $ 386
Nonperforming loans held for sale (a) $ 5 $ 5
Foreclosed real estate and other assets (b) 11 15
Total nonperforming assets (a) (c) $ 410 $ 406
Nonperforming loans and leases to total loans and leases
C&I 0.42 % 0.43 %
CRE 0.54 % 0.48 %
Consumer real estate 1.63 % 1.56 %
Credit card and other 0.22 % 0.18 %
Total NPL % 0.67 % 0.66 %
NONACCRUAL/NONPERFORMING LOANS, FORECLOSED ASSETS, & OTHER DISCLOSURES


(Dollars in millions)










Nonperforming loans and leases		March 31, 2022			December 31, 2021
	C&I	$	153		$	125
	CRE	11			9
	Consumer real estate	165			138
	Credit card and other	3			3
	Total nonperforming loans and leases (a)	$	332		$	275

Nonperforming loans held for sale (a)		$	8		$	7
Foreclosed real estate and other assets (b)		3			3
	Total nonperforming assets (a) (b)	$	343		$	285

Nonperforming loans and leases to total loans and leases
	C&I	0.50		%	0.40		%
	CRE	0.09			0.08
	Consumer real estate	1.52			1.29
	Credit card and other	0.32			0.31
	Total NPL %	0.60		%	0.50		%

ALLL / NPLs
	C&I	188		%	268		%
	CRE	1,303			1,671
	Consumer real estate	99			118
	Credit card and other	730			699
	Total ALLL / NPLs	187		%	244		%

(a)Excludes loans and leases that are 90 or more days past due and still accruing interest.

(b)~~Foreclosed real estate from GNMA loans totaled $2 million at both~~ ~~March 31, 2021 and~~ ~~December 31, 2020.~~

~~(c)~~Balances do not include government-insured foreclosed real estate. Foreclosed real estate from GNMA loans totaled $1 million as of both March 31, 2022 and December 31, 2021.


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The following table provides nonperforming assets by business segment:

Table ~~11—Nonperforming Assets by Segment~~I.2.10

(Dollars in millions) March 31, 2021 December 31, 2020
Nonperforming loans and leases (a) (b)
Regional Banking $ 226 $ 216
Specialty Banking 111 117
Corporate 57 53
Consolidated $ 394 $ 386
Foreclosed real estate (c)
Regional Banking $ 10 $ 12
Specialty Banking — 1
Corporate 1 2
Consolidated $ 11 $ 15
Nonperforming Assets (a) (b) (c)
Regional Banking $ 236 $ 228
Specialty Banking 111 118
Corporate 58 55
Consolidated $ 405 $ 401
Nonperforming loans and leases to loans and leases
Regional Banking 0.56 % 0.54 %
Specialty Banking 0.64 0.68
Corporate 6.20 5.70
Consolidated 0.67 % 0.66 %
NPA % (d)
Regional Banking 0.58 % 0.57 %
Specialty Banking 0.64 0.68
Corporate 6.28 5.87
Consolidated 0.69 % 0.69 %
NONPERFORMING ASSETS BY SEGMENT



(Dollars in millions)
Nonperforming loans and leases (a) (b)		March 31, 2022			December 31, 2021
	Regional Banking	$	219		$	163
	Specialty Banking	77			78
	Corporate	36			34
	Consolidated	$	332		$	275
Foreclosed real estate (c)
	Regional Banking	$	1		$	2
	Specialty Banking	1			—
	Corporate	1			1
	Consolidated	$	3		$	3
Nonperforming Assets (a) (b) (c)
	Regional Banking	$	220		$	165
	Specialty Banking	78			78
	Corporate	37			35
	Consolidated	$	335		$	278
Nonperforming loans and leases to loans and leases
	Regional Banking	0.57		%	0.43		%
	Specialty Banking	0.48			0.48
	Corporate	6.25			5.39
	Consolidated	0.60		%	0.50		%
NPA % (d)
	Regional Banking	0.57		%	0.44		%
	Specialty Banking	0.48			0.48
	Corporate	6.39			5.51
	Consolidated	0.61		%	0.51		%

(a)Excludes loans and leases that are 90 or more days past due and still accruing interest.

(b)Excludes loans classified as held for sale.

(c)Excludes foreclosed real estate and receivables related to government insured mortgages of $4$1 million ~~and $5 million at~~as of both March 31, ~~2021,~~2022 and December 31, ~~2020, respectively.~~2021.

(d)Ratio is non-performing assets to total loans and leases plus foreclosed real estate.

Lending Assistance for Borrowers

In addition to PPP loans, other customer support initiatives in response to the COVID-19 pandemic include incremental lending assistance for borrowers through delayed payment programs and fee waivers.

The following table provides the UPB of loans related to deferrals granted to FHN’s customers ~~that have been processed through~~as of March 31, 2022 and December 31, 2021.


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~~Table 12 - Customer Deferrals~~

~~(Dollars in millions)~~

~~As of March 31, 2021~~PART I, ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)

~~Commercial:~~Table of Contents

~~C&I~~

~~CRE~~

~~178~~

~~Total Commercial~~

~~229~~

~~Consumer:~~

~~HELOC~~

~~R/E installment loans~~

~~138~~

~~Credit card and other~~

~~Total Consumer~~

~~156~~

~~Total~~

~~385~~

~~Commercial deferrals~~ ~~were comprised primarily of general commercial (59% or $135 million) and professional commercial real estate (38% or $86 million).~~Table I.2.11

CUSTOMER DEFERRALS


(Dollars in millions)	As of March 31, 2022		As of December 31, 2021
Commercial:
C&I	$	—	$	9

CRE	5		26
Total Commercial	$	5	$	35
Consumer:
HELOC	$	6	$	5
Real estate installment loans	27		44
Credit card and other	—		—
Total Consumer	$	33	$	49
Total	$	38	$	84

To the extent that loans were past due atas of March 31, ~~2021~~2022 or December 31, ~~2020~~2021 and had been granted a deferral, they were excluded from loans past due 30 to 89

days and loans past due 90 days or more in the table and discussion below.

Past Due Loans and Potential Problem Assets

Past due loans are loans contractually past due as to interest or principal payments, but which have not yet been put on nonaccrual status. Loans ~~in the portfolio that are~~ 90 days or more past due and still accruing were ~~$13~~$23 million onas of March 31, ~~2021,~~2022 compared to ~~$17~~$40 million onas of December 31, ~~2020. The decrease was primarily driven by consumer real estate loans.~~2021. Loans 30 to 89 days past due were ~~$81~~$180 million onas of March 31, ~~2021,~~2022 compared to ~~$100~~ $108

million onas of December 31, ~~2020.~~2021. The ~~decrease~~increase included a $36 million increase in CRE loans, a $19 million increase in C&I loans, and a $14 million ~~decrease~~increase in consumer real estate ~~loans, a $12 million decrease in CRE loans, and a $4 million decrease in credit card and other consumer loans, partially offset by an increase in C&I~~ loans past due 30 to 89 days. These increases were partially driven by the expiration of certain deferred payment programs noted above.


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Table ~~13—Accruing Delinquencies~~I.2.12

(Dollars in millions) March 31, 2021 December 31, 2020
Accruing loans and leases 30+ days past due
C&I $ 26 $ 15
CRE 11 23
Consumer real estate 52 69
Credit card and other 5 10
Total 30+ Delinquency $ 94 $ 117
Accruing loans and leases 30+ days past due %
C&I 0.08 % 0.05 %
CRE 0.09 % 0.19 %
Consumer real estate 0.47 % 0.58 %
Credit card and other 0.45 % 0.87 %
Total 30+ Delinquency % 0.16 % 0.20 %
Accruing loans and leases 90+ days past due (a) (b) (c):
C&I $ — $ —
CRE — —
Consumer real Estate 13 16
Credit card and other — 1
Total accruing loans and leases 90+ days past due $ 13 $ 17
Loans held for sale
30 to 89 days past due (b) 7 6
30 to 89 days past due - guaranteed portion (b) (d) 6 5
90+ days past due (b) 13 12
90+ days past due - guaranteed portion (b) (d) 11 10
ACCRUING DELINQUENCIES & OTHER CREDIT DISCLOSURES


(Dollars in millions)
Accruing loans and leases 30+ days past due		March 31, 2022			December 31, 2021
	C&I	$	78		$	58
	CRE	49			13
	Consumer real estate	65			70
	Credit card and other	11			7
	Total accruing loans and leases 30+ days past due	$	203		$	148

Accruing loans and leases 30+ days past due %
	C&I	0.25		%	0.19		%
	CRE	0.39			0.11
	Consumer real estate	0.60			0.65
	Credit card and other	1.23			0.76
	Total accruing loans and leases 30+ days past due %	0.37		%	0.27		%






Accruing loans and leases 90+ days past due (a) (b) (c):

	C&I	$	6		$	5
	CRE	—			—


	Consumer real Estate	14			33
	Credit card and other	3			2

	Total accruing loans and leases 90+ days past due	$	23		$	40



Loans held for sale
30 to 89 days past due		$	10		$	7
30 to 89 days past due - guaranteed portion (d)		7			2
90+ days past due		22			24
90+ days past due - guaranteed portion (d)		11			12

(a)Excludes loans classified as held for sale.

(b)Amounts are not included in nonperforming/nonaccrual loans.

(c)Amounts are also included in accruing loans and leases 30+ days past due.

(d)Guaranteed loans include FHA, VA, and GNMA loans repurchased through the GNMA buyout program.

Potential problem assets represent those assets where information about possible credit problems of borrowers has caused management to have serious doubts about the borrower’s ability to comply with present repayment terms and includes loans past due 90 days or more and still accruing. This definition is believed to be substantially consistent with the standards established by Federal banking regulators for

loans classified as substandard. Potential problem assets in the loan po~~rtfolio~~portfolio were ~~$738~~$542 million on March 31, ~~2021~~2022 and ~~$718~~$597 million on December 31, ~~2020. The increase in potential problem assets was from a net increase in classified commercial loans within the C&I portfolio from a limited number of~~

~~customer migrations to substandard loans in the current quarter.~~2021. The current expectation of losses from potential problem assets has been included in management’s analysis for assessing the adequacy of the allowance for loan and lease losses.

Troubled Debt Restructurings and Loan Modifications

As part of FHN’s ongoing risk management practices, FHN attempts to work with borrowers when appropriate to extend or modify loan terms to better align with their

current ability to repay. Extensions and modifications to loans are made in accordance with


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internal policies and guidelines which conform to regulatory guidance. Each occurrence is unique to the borrower and is evaluated


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separately. In a situation where an economic concession has been granted to a borrower that is experiencing financial difficulty, FHN identifies and reports that loan as a TDR.

For loan modifications ~~that were made during 2021 and 2020~~ that met the TDR relief provisions outlined in either the CARES Act, as extended by the CAA, or revised Interagency Guidance, FHN has excluded these modifications from consideration as a TDR and has excluded loans with these qualifying modifications from designation as a TDR in the

information and discussion that follows. See Note 43 – Loans and Leases for further discussion regarding TDRs and loan modifications.

On both March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, FHN had ~~$288 million and $307~~$206 million portfolio loans classified as held-for-investment TDRs. For these TDRs, ~~respectively. For TDRs in the loan portfolio,~~including specific reserves, FHN had an allowance for loan ~~loss reserves~~and lease losses of ~~$11 million and $12~~$14 million, or 4%7% of TDR balances as of ~~both~~ March 31, ~~2021~~2022, and $12 million, or 6% of TDR balances, as of December 31, ~~2020, respectively.~~2021. Additionally, FHN had ~~$41~~$33 million and ~~$42~~$35 million of HFS loans classified as TDRs as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

The following table provides a summary of TDRs for the periods ended March 31, ~~2021~~2022 and December 31, ~~2020:~~2021:

~~Table 14—Troubled Debt Restructurings~~

(Dollars in millions) As of
March 31, 2021 As of
December 31, 2020
Held-to-maturity:
Consumer real estate:
Current $ 71 $ 77
Delinquent 2 2
Non-accrual (a) 57 61
Total consumer real estate 130 140
Credit card and other:
Current 1 1
Delinquent — —
Non-accrual — —
Total credit card and other 1 1
Commercial loans:
Current 74 82
Delinquent — —
Non-accrual 83 84
Total commercial loans 157 166
Total held-to-maturity $ 288 $ 307
Held-for-sale:
Current $ 35 $ 36
Delinquent 5 5
Non-accrual 1 1
Total held-for-sale 41 42
Total troubled debt restructurings $ 329 $ 349
Table I.2.13

TROUBLED DEBT RESTRUCTURINGS


(Dollars in millions)	March 31, 2022		December 31, 2021
Held for investment:
Commercial loans:
Current	$	47	$	53
Delinquent	1		—
Non-accrual	31		35
Total commercial loans	$	79	$	88
Consumer real estate:
Current	$	69	$	60
Delinquent	2		4
Non-accrual (a)	56		53
Total consumer real estate	$	127	$	117
Credit card and other:
Current	$	—	$	1
Delinquent	—		—
Non-accrual	—		—
Total credit card and other	—		1





Total held for investment	$	206	$	206

Held for sale:
Current	$	25	$	27
Delinquent	7		7
Non-accrual	1		1
Total held for sale	33		35
Total troubled debt restructurings	$	239	$	241

(a)Balances as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021 include ~~$13~~$12 million ~~and $11 million, respectively,~~ of discharged ~~bankruptcies.~~bankruptcies for both periods.

Investment Securities

FHN’s investment securities portfolio consists principally of debt securities ~~including~~available for sale. FHN maintains a highly-rated securities portfolio consisting primarily of government agency issued mortgage-backed securities

and ~~government agency issued~~ collateralized mortgage obligations ~~all of~~

~~which are classified as AFS. The~~. The securities portfolio provides a source of income and liquidity and is an important tool used to balance the interest rate risk of the loan and deposit portfolios. The securities portfolio is ~~periodically evaluated in light of established ALM objectives, changing market~~


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periodically evaluated in light of established ALM objectives, changing market conditions that could affect the profitability of the portfolio, the regulatory environment, and the level of interest rate risk to which FHN is exposed. These evaluations may result in steps taken to adjust the overall balance sheet positioning.

Investment securities ~~were $8.4~~were $9.9 billion and $9.4 billion on March 31, ~~2021,~~2022 and De ~~up fr~~cember 31, 2021, representing approximately 11% o~~om $8.0 billion on December 31, 2020 and represented approximately 10% of~~f total assets ~~for~~at the end of both periods.See Note 32 - Investment Securities for more information about the securities ~~portfolio, including gross unrealized gains and losses by type~~portfolio.

Deposits

Total deposits of $74.1 billion as of March 31, 2022 decreased $781 million from December 31, 2021 reflecting an improvement in deposit mix during the quarter. Interest-bearing deposits decreased $949 million while noninterest-bearing deposits increased $168 million.

~~of security, contractual maturities,~~

See Table I.2.2 - Average Balances, Net Interest Income and ~~securities pledged.~~

~~Deposits~~

~~Total deposits as of~~ ~~March 31, 2021~~ ~~increased 5% to $73.2 billion~~ ~~from $70.0 billion~~Yields/Rates in this Report for information on ~~December 31, 2020 driven by an~~ ~~increase in non-interest bearing~~average deposits ~~largely reflecting the impact of government stimulus checks and PPP loan funding.~~

including average rates paid. The following table summarizes the major components of deposits as of March 31, ~~2021~~2022 and December 31, ~~2020.~~2021.

Table ~~15— Deposits~~I.2.14

DEPOSITS


		March 31, 2021				December 31, 2020									March 31, 2022				December 31, 2021
(Dollars in millions)	(Dollars in millions)	Amount		Percent of total		Amount		Percent of total		Change		Percent		(Dollars in millions)	Amount		Percent of total		Amount		Percent of total		Change		Percent
Savings	Savings	$	27,023	37	%	$	27,324	39	%	$	(301)	(1)	%	Savings	$	25,772	35	%	$	26,457	35	%	$	(685)	(3)	%
Time deposits	Time deposits	4,653		6		5,070		7		(417)		(8)		Time deposits	3,165		4		3,500		5		(335)		(10)
Other interest-bearing deposits	Other interest-bearing deposits	16,444		23		15,415		22		1,029		7		Other interest-bearing deposits	17,126		23		17,055		23		71		—

Interest-bearing deposits		48,120		66		47,809		68		311		1
Total interest-bearing deposits														Total interest-bearing deposits	46,063		62		47,012		63		(949)		(2)
Noninterest-bearing deposits	Noninterest-bearing deposits	25,046		34		22,173		32		2,873		13		Noninterest-bearing deposits	28,051		38		27,883		37		168		1
Total deposits	Total deposits	$	73,166	100	%	$	69,982	100	%	$	3,184	5	%	Total deposits	$	74,114	100	%	$	74,895	100	%	$	(781)	(1)	%

Short-Term Borrowings

Short-term borrowings include federal funds purchased, securities sold under agreements to repurchase, trading liabilities, and other short-term borrowings. Total short-term borrowings were $2.2 billion asand $2.6 billion as of March 31, ~~2021~~2022 and December 31, ~~2020.~~2021, respectively.

Short-term borrowings balances fluctuate largely based on the level of FHLB borrowing as a result of loan demand, deposit levels and balance sheet funding strategies. Trading liabilities fluctuate based on various factors,

including levels of trading securities and hedging strategies. Federal funds purchased fluctuates depending on the amount of excess funding of FHN’s correspondent bank customers. Balances of securities sold under agreements to

~~resell~~ repurchase fluctuate based on cost attractiveness relative to FHLB borrowing levels and the ability to pledge securities toward such transactions.

Term Borrowings

Term borrowings include senior and subordinated borrowings with original maturities greater than one year. ~~Term~~

Total term borrowings were ~~$1.7~~$1.6 billion as as of March 31, ~~2021~~2022 and December 31, ~~2020.~~2021.

Capital

Management’s objectives are to provide capital sufficient to cover the risks inherent in FHN’s businesses, to maintain excess capital to well-capitalized standards, and to assure ready access to the capital markets. Total equity was ~~$8.3~~$8.7 billion at ~~both~~ March 31, ~~2021~~2022 and $8.5 billion at December 31, ~~2020.~~

S2021. ~~ignificant~~Significant changes included net income of ~~$236~~$198 million and the issuance of $494 million in Series G preferred stock, which ~~was~~were offset by ~~a decrease in AOCI of $101~~$90 million ~~$92 million~~

in common and preferred dividends and ~~$62 million~~a decrease in ~~common share repurchases.~~

AOCI of $424 million.


~~FIRST HORIZON CORPORATION~~			88			~~1Q21 FORM 10-Q REPORT~~

The following tables provide a reconciliation of shareholders’ equity from the Consolidated Balance Sheets to Common Equity Tier 1, Tier 1 and Total Regulatory Capital as well as certain selected capital ratios:


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Table ~~16—Regulatory Capital and Ratios~~I.2.15

(Dollars in millions) March 31, 2021 December 31, 2020
Shareholders’ equity $ 8,012 $ 8,012
Modified CECL transitional amount (a) 178 191
FHN non-cumulative perpetual preferred (470) (470)
Common equity tier 1 before regulatory adjustments $ 7,720 $ 7,733
Regulatory adjustments:
Disallowed goodwill and other intangibles (1,745) (1,757)
Net unrealized (gains) losses on securities available for sale (5) (108)
Net unrealized (gains) losses on pension and other postretirement plans 256 260
Net unrealized (gains) losses on cash flow hedges (10) (12)
Disallowed deferred tax assets (1) (5)
Other deductions from common equity tier 1 (1) (1)
Common equity tier 1 $ 6,214 $ 6,110
FHN non-cumulative perpetual preferred (b) 377 377
Qualifying noncontrolling interest— First Horizon Bank preferred stock 295 295
Tier 1 capital $ 6,886 $ 6,782
Tier 2 capital 1,120 1,153
Total regulatory capital $ 8,006 $ 7,935
Risk-Weighted Assets
First Horizon Corporation $ 62,339 $ 63,140
First Horizon Bank 61,610 62,508
Average Assets for Leverage
First Horizon Corporation 83,959 82,347
First Horizon Bank 83,242 81,709
REGULATORY CAPITAL DATA


(Dollars in millions)	March 31, 2022		December 31, 2021
Shareholders’ equity	$	8,401	$	8,199
Modified CECL transitional amount (a)	85		114
FHN non-cumulative perpetual preferred	(1,014)		(520)
Common equity tier 1 before regulatory adjustments	$	7,472	$	7,793
Regulatory adjustments:
Disallowed goodwill and other intangibles	(1,698)		(1,711)
Net unrealized (gains) losses on securities available for sale	440		36
Net unrealized (gains) losses on pension and other postretirement plans	253		255
Net unrealized (gains) losses on cash flow hedges	18		(3)
Disallowed deferred tax assets	—		(2)
Other deductions from common equity tier 1	(1)		(1)
Common equity tier 1	$	6,484	$	6,367
FHN non-cumulative perpetual preferred (b)	920		426
Qualifying noncontrolling interest— First Horizon Bank preferred stock	295		295

Tier 1 capital	$	7,699	$	7,088
Tier 2 capital	876		830
Total regulatory capital	$	8,575	$	7,918
Risk-Weighted Assets
First Horizon Corporation	$	65,042	$	64,183
First Horizon Bank	64,404		63,601
Average Assets for Leverage
First Horizon Corporation	87,401		87,683
First Horizon Bank	86,677		86,953

March 31, 2021 December 31, 2020
Ratio Amount Ratio Amount
Common Equity Tier 1
First Horizon Corporation 9.97 % $ 6,214 9.68 % $ 6,110
First Horizon Bank 10.72 6,606 10.46 6,537
Tier 1
First Horizon Corporation 11.05 6,886 10.74 6,782
First Horizon Bank 11.20 6,901 10.93 6,832
Total
First Horizon Corporation 12.84 8,006 12.57 7,935
First Horizon Bank 12.75 7,855 12.52 7,827
Tier 1 Leverage
First Horizon Corporation 8.20 6,886 8.24 6,782
First Horizon Bank 8.29 6,901 8.36 6,832
Other Capital Ratios
Total period-end equity to period-end assets 9.49 9.86
Tangible common equity to tangible assets (c) 6.64 6.89
Adjusted tangible common equity to risk weighted assets (c) 9.12 8.82
Table I.2.16

REGULATORY RATIOS & AMOUNTS


	March 31, 2022				December 31, 2021
	Ratio		Amount		Ratio		Amount
Common Equity Tier 1
First Horizon Corporation	9.97	%	$	6,484	9.92	%	$	6,367
First Horizon Bank	10.64		6,851		10.75		6,838
Tier 1
First Horizon Corporation	11.84		7,699		11.04		7,088
First Horizon Bank	11.10		7,146		11.22		7,133
Total
First Horizon Corporation	13.18		8,575		12.34		7,918
First Horizon Bank	12.26		7,893		12.41		7,893
Tier 1 Leverage
First Horizon Corporation	8.81		7,699		8.08		7,088
First Horizon Bank	8.24		7,146		8.20		7,133
Other Capital Ratios
Total period-end equity to period-end assets	9.81				9.53
Tangible common equity to tangible assets (c)	6.44				6.73
Adjusted tangible common equity to risk-weighted assets (c)	9.27				9.20

(a)The modified CECL transitional amount ~~is calculated as defined in the final rule issued by the banking regulators on August 26, 2020 and~~ includes ~~the full amount of~~ the impact to retained earnings from the initial adoption of CECL plus 25% of the change in the adjusted allowance for credit losses since FHN’s initial adoption of CECL through December 31, 2021. For the three months ended March 31, ~~2021 and~~2022, 25% of the full amount at December 31, ~~2020~~.2021 is phased out and not included in Common Equity Tier 1 capital.

(b)The ~~$93~~$94 million carrying value of the Series D preferred stock does not qualify as Tier 1 capital because the earliest redemption date is less than five years from the issuance ~~date.~~date, which was re-set to July 1, 2020 when the IBKC merger closed.

(c)Tangible common equity to tangible assets and ~~Adjusted~~adjusted tangible common equity to risk-weighted assets are non-GAAP measures and are reconciled to total equity to total assets (GAAP) in the Non-GAAP to GAAP Reconciliation - Table ~~20.~~I.2.24.


~~FIRST HORIZON CORPORATION~~			8986			~~1Q21~~1Q22 FORM 10-Q REPORT


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Banking regulators define minimum capital ratios for bank holding companies and their bank subsidiaries. Based on the capital rules and definitions prescribed by the banking regulators, should any depository institution’s capital ratios decline below predetermined levels, it would become subject to a series of increasingly restrictive regulatory actions.

The system categorizes a depository institution’s capital position into one of five categories ranging from well-capitalized to critically under-capitalized. For an institution the size of FHN to qualify as well-capitalized, Common Equity Tier 1, Tier 1 Capital, Total Capital, and Leverage capital ratios must be at least 6.50%, 8.00%, 10.00%, and 5.00%, respectively. Furthermore, a capital conservation buffer of 50 basis points above these levels must be maintained on the Common Equity Tier 1, Tier 1 Capital and Total Capital ratios to avoid restrictions on dividends, share repurchases and certain discretionary bonuses.

As of March 31, ~~2021,~~2022, each of FHN and First Horizon Bank had sufficient capital to qualify as well-capitalized

institutions and to meet the capital conservation buffer requirement. Capital ratios for both FHN and First Horizon Bank are calculated under the final rule issued by the banking regulators in 2020 to delay the effects of CECL on regulatory capital for two years, followed by a three-year transition period.

For ~~both~~ FHN, ~~and First Horizon Bank,~~ the risk-based regulatory capital ratios increased in first quarter ~~2021~~2022 relative to ~~fourth quarter 2020~~year-end 2021 primarily from the impact of net income less dividends ~~and share repurchases~~ during the first three months of ~~2021~~2022. FHN's Tier 1 Capital and ~~a decrease in risk weighted assets,~~Tier 1 Leverage ratios as of March 31, 2022 further benefited from the issuance of its Series G preferred stock. First Horizon Bank's risk-based regulatory capital ratios decreased from December 31, 2021 primarily from ~~loan activity.~~ an increase in risk-weighted assets.

During ~~2021,~~2022, capital ratios are expected

to remain above well-capitalized standards plus the required capital conservation buffer.

Common Stock Purchase Programs

General ~~Authority~~Purchase Program

Pursuant to Board authority, FHN may repurchase shares of its common stock from time to time and will evaluate the level of capital and take action designed to generate or use capital, as appropriate, for the interests of the shareholders, subject to legal and regulatory restrictions. FHN’s Board has not authorized a preferred stock purchase program.

On January 27, 2021, FHN announced that its Board of Directors approved a new $500 million common share purchase program that ~~will~~was to expire on January 31, 2023, replacing the 2018 program, which was terminated. On October 26, 2021, FHN announced that the 2021 program had been increased by $500 million and extended to October 31, 2023. ~~The new~~ Like the 2018 program, the 2021

program is not tied to any compensation ~~plan, and replaced the previous general share repurchase program, which was terminated by the Board.~~plan. Purchases may be made in the open market or through privately negotiated transactions, including under Rule 10b5-1 plans as well as accelerated share repurchase and other structured transactions. The timing and exact amount of common share repurchases will be subject to various factors, including FHN's capital position, financial performance, capital impacts of strategic initiatives, market conditions and regulatory considerations.

As of March 31, ~~2021, $59~~2022, $401 million in purchases had been made life-to-date under ~~this authority~~the 2021 program at an average price per share of ~~$16.12,~~$16.60, or ~~$16.10~~$16.58 excluding commissions. Management does not currently anticipate purchasing additional shares under this authority.

Table ~~17a—Issuer Purchases of Common Stock - General Authority~~I.2.17

(Dollar values and volume in thousands, except per share data) Total number
of shares
purchased Average price
paid per share (a) Total number of
shares purchased
as part of publicly
announced programs Maximum approximate dollar value that may yet be purchased under the programs
2021
January 1 to January 31 — N/A — $ 500,000
February 1 to February 28 2,128 15.59 2,128 466,828
March 1 to March 31 1,515 16.88 1,515 441,258
Total 3,643 $ 16.12 3,643
COMMON STOCK PURCHASES—GENERAL PROGRAM

~~N/A - not applicable~~


(Dollar values and volume in thousands, except per share data)	Total number of shares purchased	Average price paid per share (a)	Total number of shares purchased as part of publicly announced programs	Maximum approximate dollar value that may yet be purchased under the programs
2022
January 1 to January 31	—	N/A	—	$	598,646
February 1 to February 28	—	N/A	—	598,646
March 1 to March 31	—	N/A	—	598,646
Total	—	N/A	—

(a) Represents total costs including commissions paid.


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Compensation ~~Authority~~Plans Purchase Program

A consolidated compensation plan share purchase program was announced on August 6, 2004. This

program consolidated into a single share purchase program all of the previously authorized compensation plan share programs as well as the renewal of the authorization to purchase shares for


~~FIRST HORIZON CORPORATION~~			90			~~1Q21 FORM 10-Q REPORT~~

use in connection with two compensation plans for which the share purchase authority had expired.

The total amount authorized under this consolidated compensation plan share purchase program is 29.6 million shares calculated before adjusting for stock dividends distributed through January 1, 2011. The authorization has been reduced for that portion which relates to

compensation plans for which no ~~options~~stock option awards remain outstanding. The shares may be purchased over the option exercise ~~period~~periods of the various compensation plans on or before

December 31, 2023. Purchases may be made in the open market or through privately negotiated transactions and are subject to various factors including FHN's capital position, financial performance, capital impacts of strategic initiatives, market ~~market~~ conditions and regulatory restrictions. As of March 31, ~~2021,~~2022, the maximum number of shares that may be purchased under the program was ~~23.8~~23.0 million shares. Management currently does not anticipate purchasing a material number of shares under this authority during ~~2021.~~2022.

Table ~~17b—Issuer Purchase of Common Stock - Compensation Authority~~I.2.18

(Volume in thousands, except per share data) Total number
of shares
purchased Average price
paid per share Total number of
shares purchased
as part of publicly
announced programs Maximum number
of shares that may
yet be purchased
under the programs
2021
January 1 to January 31 170 $ 13.54 170 23,861
February 1 to February 28 8 13.97 8 23,854
March 1 to March 31 44 16.69 44 23,810
Total 221 $ 14.18 221
COMMON STOCK PURCHASES—COMPENSATION PLANS PROGRAM


(Volume in thousands, except per share data)	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced programs	Maximum number of shares that may yet be purchased under the programs
2022
January 1 to January 31	67	$	18.19	67	23,016
February 1 to February 28	16	17.69		16	22,999
March 1 to March 31	36	23.79		36	22,963
Total	120	$	19.82	120

Risk Management

There have been no significant changes to FHN’s risk management practices as described under “Risk Management” included in Item 7 of FHN’s ~~2020~~2021 Annual Report on Form ~~10-K.~~10-K, as amended.

~~MARKET RISK MANAGEMENT~~Market Risk Management

Value-at-Risk and Stress Testing

VaR is a statistical risk measure used to estimate the potential loss in value from adverse market movements over an assumed fixed holding period within a stated confidence level. FHN employs a model to compute daily VaR measures for its trading

securities inventory. FHN computes VaR using historical simulation with a 1-year lookback period at a 99% confidence level ~~and~~with 1-day and 10-day time horizons. Additionally, FHN computes a

Stressed VaR measure. The SVaR computation uses the same model but with model inputs reflecting historical data from a continuous 12-month period that reflects a period of significant financial stress appropriate for ~~our~~the trading securities portfolio.

A summary of FHN’s VaR and SVaR measures for 1-day and 10-day time horizons is presented in the following table:


~~FIRST HORIZON CORPORATION~~			9188			~~1Q21~~1Q22 FORM 10-Q REPORT

~~A summary of FHN’s VaR and SVaR measures for 1-day and 10-day time horizons is as follows:~~


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Table ~~18—~~I.2.19

VaR ~~and~~& SVaR ~~Measures~~MEASURES


		Three Months Ended March 31, 2021						As of March 31, 2021	Three Months Ended March 31, 2022								As of March 31, 2022
(Dollars in millions)	(Dollars in millions)	Mean		High		Low						(Dollars in millions)	Mean		High		Low
1-day	1-day											1-day
VaR	VaR	$	3	$	4	$	1			$	1	VaR	$	2	$	2	$	2	$	2
SVaR	SVaR	3		4		2				3		SVaR	5		7		4		5
10-day	10-day											10-day
VaR	VaR	12		21		1				4		VaR	4		5		3		4
SVaR	SVaR	15		21		11				13		SVaR	23		34		18		24

		Three Months Ended March 31, 2020						As of March 31, 2020	Three Months Ended March 31, 2021								As of March 31, 2021
(Dollars in millions)	(Dollars in millions)	Mean		High		Low						(Dollars in millions)	Mean		High		Low
1-day	1-day											1-day
VaR	VaR	$	2	$	7	$	1			$	5	VaR	$	3	$	4	$	1	$	1
SVaR	SVaR	9		18		5				5		SVaR	3		5		2		3
10-day	10-day											10-day
VaR	VaR	7		25		2				19		VaR	12		21		1		4
SVaR	SVaR	27		43		16				19		SVaR	15		21		11		13

		Year Ended December 31, 2020						As of December 31, 2020
(Dollars in millions)		Mean		High		Low
1-day
VaR		$	3	$	7	$	1			$	2
SVaR		5		18		1				2
10-day
VaR		13		25		2				10
SVaR		18		43		6				10


	Year Ended December 31, 2021						As of December 31, 2021
(Dollars in millions)	Mean		High		Low
1-day
VaR	$	1	$	4	$	1	$	2
SVaR	4		7		2		5
10-day
VaR	5		21		1		5
SVaR	18		27		11		22

FHN’s overall VaR measure includes both interest rate risk and credit spread risk. Separate measures of these component risks are as follows:

Table ~~19—Schedule of Risks Included in~~I.2.20

SCHEDULE OF RISKS INCLUDED IN VaR


		As of March 31, 2021				As of March 31, 2020				As of December 31, 2020					As of March 31, 2022				As of March 31, 2021				As of December 31, 2021
(Dollars in millions)	(Dollars in millions)	1-day		10-day		1-day		10-day		1-day		10-day		(Dollars in millions)	1-day		10-day		1-day		10-day		1-day		10-day
Interest rate risk	Interest rate risk	$	1	$	2	$	1	$	3	$	1	$	2	Interest rate risk	$	—	$	1	$	1	$	2	$	1	$	1
Credit spread risk	Credit spread risk	—		1		2		12		2		6		Credit spread risk	1		1		—		1		1		1

The potential risk of loss reflected by FHN’s VaR measures assumes the trading securities inventory is static. Because FHN Financial procures fixed income securities for purposes of distribution to clients, its trading securities inventory turns over regularly. Additionally, FHNF traders actively manage the trading securities inventory continuously throughout each trading day. Accordingly, ~~FHN’s~~FHNF’s trading securities inventory is highly dynamic, rather than

static. As a result, it would be rare for FHNF to incur a negative revenue day in its fixed income activities ofat the ~~level~~levels indicated by its VaR ~~measurements.~~measures.

In addition to being used in FHN’s daily market risk management process, the VaR and SVaR measures are also used by FHN in computing its regulatory market risk capital requirements in accordance with the Market Risk Capital rules. For additional


~~FIRST HORIZON CORPORATION~~			92			~~1Q21 FORM 10-Q REPORT~~

information regarding FHN's capital adequacy refer to the Capital section of this MD&A.

FHN also performs stress tests on its trading securities portfolio to calculate the potential loss under various


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assumed market scenarios. Key assumed stresses used in those tests are:

Down 25 bps - assumes an instantaneous downward move in interest rates of 25 basis points at all points on the interest rate yield curve.

Up 25 bps - assumes an instantaneous upward move in interest rates of 25 basis points at all points on the interest rate yield curve.

Curve flattening - assumes an instantaneous flattening of the interest rate yield curve through an increase in short-term rates and a decrease in long-term rates. The 2-year point on the Treasury yield curve is assumed to increase 15 basis points and the 10-year point on the Treasury yield curve is assumed to decrease 15 basis points. Shifts in other points on the yield curve are predicted based on their correlation to the 2-year and 10-year points.

Curve steepening - assumes an instantaneous steepening of the interest rate yield curve through a decrease in short-term rates and an increase in long-term rates. The 2-year point on the Treasury yield curve

is assumed to decrease 15 basis points and the 10-year point on the Treasury yield curve is assumed to increase 15 basis points. Shifts in other points on the yield curve are predicted based on their correlation to the 2-year and 10-year points.

Credit spread widening - assumes an instantaneous increase in credit spreads (the difference between yields on Treasury securities and non-Treasury securities) of 25 basis points.

Model Validation

Trading risk management personnel within FHN Financial have primary responsibility for model risk management with respect to the model used by FHN to compute its VaR measures and perform stress testing on the trading inventory. Among other procedures, these personnel monitor model results and perform periodic backtesting as part of an ongoing process of validating the accuracy of the model. These model risk management activities are subject to annual review by FHN’s Model Validation Group, an independent assurance group charged with oversight responsibility for FHN’s model risk management.

Interest Rate Risk Management

~~INTEREST RATE RISK MANAGEMENT~~

Net Interest Income Simulation Analysis

The information provided in this section, including the discussion regarding the outcomes of simulation analysis and rate shock analysis, is forward-looking. Actual results, if the assumed scenarios were to occur, could differ because of interest rate movements, the ability of management to execute its business plans, and other factors, including those presented in the Forward-Looking Statements section of this Report.

Management uses a simulation model to measure interest rate risk and to formulate strategies to improve balance sheet positioning, earnings, or both, within FHN’s interest rate risk, liquidity, and capital guidelines. Interest rate exposure is measured by forecasting 12 months of NII under various interest rate scenarios and comparing the percentage change in NII for each scenario to a base case scenario where interest rates remain unchanged. Assumptions are made regarding future balance sheet composition, interest rate movements, and loan and deposit pricing. In addition, assumptions are made about the magnitude of asset prepayments and earlier than anticipated deposit withdrawals. The results of these scenarios help FHN develop strategies for managing exposure to interest rate risk. While management believes the assumptions used and scenarios selected in its simulations are reasonable, simulation modeling provides only an estimate, not a precise calculation, of exposure to any given change in interest rates.

Based on a static balance sheet as of March 31, ~~2021,~~2022, NII exposures over the next 12 months assuming rate shocks of plus 25 basis points, 50 basis points, 100 basis points,

and 200 basis points are estimated to have favorable variances ~~of 2.5%, 4.7%, 9.3%, and 16.0%, respectively compared to~~as shown in the table below.

Table I.2.21

INTEREST RATE SENSITIVITY


Shifts in Interest Rates (in bps)						% Change in Projected Net Interest Income
+25						3.8%
+50						8.1%
+100						16.4%
+200						28.9%

~~base NII.~~ A steepening yield curve scenario where long-term rates increase by 50 basis points and short-term rates are static, results in a favorable NII variance o~~f 0.7%~~ of 0.5%. . A flattening yield curve scenario where long-term rates decrease by 50 basis points and short-term rates are static, results in an unfavorable NII variance o~~f 0.9%~~of 0.7%. Rate shocks of minus 25 basis points and 50 basis points result in unfavorable NII variances of ~~1.7%~~4.6% and ~~2.0%~~7.7%, assuming the absence of negative rates. These hypothetical scenarios are used to create a risk measurement framework, and do not necessarily represent management’s current view of future interest rates or market developments.

FHN’s net interest income has been ~~and likely will continue to be,~~ impacted by the disruption from the COVID-19 pandemic and its variants as well as the ~~low rate~~low-rate environment. The impact of government stimulus programs and other developments have also influenced net interest income results, although the impacts from these programs have abated, and interest rates have begun to increase and are expected to


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~~The increase~~continue increasing in the ~~unemployment rate, client loan deferral requests, the impact of government assistance programs, and other developments have influenced net interest income results.~~future. FHN ~~is monitoring~~continues to monitor current economic trends and potential exposures closely.

~~LIQUIDITY RISK MANAGEMENT~~

Liquidity Risk Management

Among other things, ALCO is responsible for liquidity management: the funding of assets with liabilities of appropriate duration, while mitigating the risk of unexpected cash needs. ALCO and the Board of Directors have adopted a Liquidity Policy of which the objective is to ensure that FHN meets its cash and collateral obligations promptly, in a cost-effective manner and with the highest degree of reliability. The maintenance of adequate levels of asset and liability liquidity should provide FHN with the ability to meet both expected and unexpected cash and collateral needs. Key liquidity ratios, asset liquidity levels, and the amount available from funding sources are reported to ALCO on a regular basis. FHN’s Liquidity Policy establishes liquidity limits that are deemed appropriate for FHN’s risk profile.

In accordance with the Liquidity Policy, ALCO manages FHN’s exposure to liquidity risk through a dynamic, real time forecasting methodology. Base liquidity forecasts are reviewed by ALCO and are updated as financial conditions dictate. In addition to the baseline liquidity reports, robust stress testing of assumptions and funds availability are periodically reviewed. FHN maintains a contingency funding plan that may be executed should unexpected difficulties arise in accessing funding that affects FHN, the industry, or both. Subject to market conditions and compliance with applicable regulatory requirements from time to time, funds are available from a number of sources, including the available-for-sale securities portfolio, dealer and commercial customer repurchase agreements, access to the overnight and term Federal Funds markets, incremental borrowing capacity at the FHLB ($~~13.9~~14.5 billion w ~~was~~as available as of March 31, ~~2021)~~2022), brokered deposits, loan sales, syndications, and access to the Federal Reserve Bank.

Core deposits are a significant source of funding and have historically been a stable source of liquidity for banks. Generally, core deposits represent funding from a financial institution's ~~customer~~client base which ~~provide~~provides inexpensive, predictable pricing. The ratio of ~~total~~average loans, excluding loans HFS ~~and~~and restricted real estate loans, to average core deposits was 74% fo~~86%~~ ~~for~~r March 31, ~~2021~~2022 and ~~97%~~80% for December 31, ~~2020.~~2021.

FHN may also use unsecured short-term borrowings as a source of liquidity. Federal funds purchased from correspondent bank clients are considered to be

substantially more stable than funds purchased in the national broker markets for federal funds due to the long, historical, and reciprocal nature of banking services provided by FHN to these correspondent banks. The remainder of FHN’s wholesale short-term borrowings consists of securities sold under agreements to repurchase

transactions accounted for as secured borrowings with business clients or broker dealer counterparties.

Both FHN and First Horizon Bank have the ability to generate liquidity by issuing senior or subordinated unsecured debt, preferred equity, and common equity, subject to market conditions and compliance with applicable regulatory requirements. In February 2022, FHN issued and sold to TD 4,936 shares of Series G Perpetual Convertible Preferred Stock in a private placement transaction for $494 million. As of March 31, ~~2021,~~2022, FHN had outstanding $1.3 billion in senior and subordinated unsecured debt and ~~$470 million~~$1.0 billion in non-cumulative perpetual preferred stock. As of March 31, ~~2021,~~2022, First Horizon Bank and subsidiaries had outstanding preferred shares of $295 million, which are reflected as noncontrolling interest on the Consolidated Balance Sheets.

Parent company liquidity is primarily provided by cash flows stemming from dividends and interest payments collected from subsidiaries. These sources of cash represent the primary sources of funds to pay cash dividends to shareholders and principal and interest to debt holders of FHN. Applying the dividend restrictions imposed under applicable federal and state rules as outlined above, the Bank’s total amount available for dividends was ~~$969 million~~$1.1 billion as of April 1, ~~2021.~~ 2022.

In March 2022, FHN agreed to suspend the Dividend Reinvestment Plan in connection with the TD acquisition. As a result of the suspension of the Plan, participants in the Plan received their first quarter 2022 FHN dividend, paid on April 1, 2022, in cash. During the suspension period, dividend payments of FHN will not be automatically reinvested in additional shares of FHN common stock and participants in the Plan will be unable to purchase shares of FHN common stock through optional cash investments under the Plan.

First Horizon Bank declared and paid common dividends to the parent company in the ~~amount~~amounts of ~~$183~~$180 million and $85 million in first and second quarter ~~2021~~2022 and ~~$65~~$770 million in ~~first quarter 2020.~~2021. First Horizon Bank declared preferred dividends in ~~the~~ first quarter ~~of 2021 which were payable in April 2021~~2022 and declared and paid preferred dividends in each quarter of ~~2020.~~2021. Additionally, First Horizon Bank declared preferred dividends in second quarter 2022, payable in July 2022.

Payment of a dividend to shareholders of FHN is dependent on several factors which are considered by the Board. These factors include FHN’s current and prospective capital, liquidity, and other needs, applicable regulatory restrictions (including capital conservation buffer requirements) and availability of funds to FHN


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through a dividend from First Horizon Bank. Additionally, banking regulators generally require insured banks and bank holding companies to pay cash dividends only out of current operating earnings. ~~Consequently, the decision~~ ~~of whether FHN will pay future dividends and the amount of dividends will be affected by current operating results.~~

FHN paid a cash dividend of $0.15 per common share on April 1, ~~2021.~~2022. FHN paid cash dividends of ~~$1,550 per Series A preferred share and~~ $1,625 per Series E preferred share and $1,175 per Series F preferred share on April ~~12, 2021~~11, 2022 and $165 per Series C preferred share and $305 per Series D preferred share on May ~~3, 2021.~~2, 2022. In addition, in April ~~2021,~~2022, the Board approved cash dividends per share in the following amounts:

Table I.2.22


~~FIRST HORIZON CORPORATION~~			94			~~1Q21 FORM 10-Q REPORT~~

CASH DIVIDENDS

APPROVED BUT NOT PAID

Dividend/Share

Record Date

Payment Date

Common Stock

0.15

06/~~11/2021~~10/2022

07/01/~~2021~~2022

Preferred Stock

~~Series A~~

~~1,550.00~~

~~06/25/2021~~

~~07/12/2021~~

Series B

331.25

07/~~16/2021~~15/2022

08/~~02/2021~~01/2022

Series C

165.00

07/~~16/2021~~15/2022

08/~~02/2021~~01/2022

Series E

1,625.00

06/~~25/2021~~24/2022

07/~~12/2021~~11/2022

Series F	$	1,175.00	06/24/2022	07/11/2022

In determining potential loss content, claims are analyzed by purchaser, vintage, and claim type. FHN considers various inputs including claim rate estimates, historical average repurchase and loss severity rates, mortgage insurance cancellations, and mortgage insurance curtailment requests. Inputs are applied to claims in the

active pipeline, as well as to historical average inflows to estimate loss content related to potential future inflows. Management also evaluates the nature of claims from purchasers and/or servicers of loans sold to determine if qualitative adjustments are appropriate.

Repurchase and Foreclosure Liability

FHN’s repurchase and foreclosure liability, primarily related to its pre-2009 mortgage business, is comprised of accruals to cover estimated loss content

in the active pipeline (consisting of mortgage loan repurchase, make-whole, foreclosure/servicing demands and certain related exposures), estimated future inflows, and estimated loss content related to certain known claims not currently included in the active pipeline. The liability contemplates repurchase/make-whole and damages obligations and

estimates for probable incurred losses associated with loan populations excluded from the settlements with the GSEs, as well as other whole loans sold, mortgage insurance ~~cancellations~~cancellation rescissions, and loans included in bulk servicing sales effected prior to the settlements with the GSEs. FHN compares the estimated probable incurred losses determined under the applicable loss estimation approaches for the respective periods with current


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reserve levels. Changes in the estimated required liability levels are recorded as necessary through the repurchase

and foreclosure provision. The repurchase and foreclosure liability was ~~$16~~$17 million as of March 31, ~~2021~~2022 and December 31, ~~2020.~~2021.

~~Off-Balance Sheet Arrangements~~

In the normal course of business, FHN is a party to a number of activities that contain credit, market and operational risk that are not reflected in whole or in part in the consolidated financial statements. Such activities include traditional off-balance sheet credit-related financial instruments. FHN provides customers with off-balance sheet credit support through loan commitments, lines of credit, and standby letters of credit. Many of the commitments are expected to expire unused or be only partially used; therefore, the total amount of commitments does not necessarily represent future cash requirements. Based on its available liquidity and available borrowing capacity, FHN anticipates it will continue to have sufficient funds to meet its current commitments.


~~FIRST HORIZON CORPORATION~~			95			~~1Q21 FORM 10-Q REPORT~~

Market Uncertainties and Prospective Trends

FHN’s future results could be affected both positively and negatively by several known trends. Key among those are changes in the U.S. and global economy and outlook, government actions affecting interest rates, government actions intended to stimulate the economy, and government actions and proposals which could have negative impacts on the ~~availability and administration of stimulus relief for the economy.~~economy at large or on certain

businesses. Additional ~~impacts include~~risks relate to how the COVID-19 pandemic ~~affects~~continues to affect FHN’s clients, ~~as well as~~ political uncertainty, ~~potential~~ changes in federal policies (including those publicly discussed, formally proposed, or recently implemented) and the potential ~~impact to~~impacts of those changes on our businesses and clients, and whether FHN’s strategic ~~initiatives. The global COVID-19 pandemic has led to periods of significant volatility in financial commodities (including oil~~initiatives will succeed.

Inflation, Recession, and ~~gas) and other markets, and has adversely affected FHN’s and its clients' ability to conduct normal business, and could harm FHN’s business and future results of operations.~~Federal Reserve Policy

In March 2020, in response to the economic downturn associated with the COVID-19 pandemic along with societal and government reactions to it, the Federal Reserve ~~lowered~~"eased" by lowering short-term interest rates ~~twice~~ and ~~started a “quantitative easing”~~starting an asset purchase program intended to lower longer-term interest rates and foster access to credit. The effective yields of 10-year and 30-year U.S. Treasury securities achieved record low rates and the U.S. Congress enacted relief legislation which, among other things, was intended to provide emergency credit to businesses at risk for failure from government and public actions related to the COVID-19 pandemic, and to mitigate the severity of an economic recession.rates. These changes in interest rates and the volatility in the market negatively impacted FHN’s net interest margin. Amortization of net processing fees related to government relief programs associated with the COVID-19 pandemic, including the Paycheck Protection Program, ~~has~~ offset a portion of the net interest margin decline.

~~COVID-19 Pandemic~~

~~Government and societal reaction~~ During 2021, easing policy continued. Interest rates fluctuated but remained very low, continuing to ~~the COVID-19 pandemic caused extraordinary disruption to the U.S. economy, as well as to the local economies within~~adversely impact FHN's footprint, during the final three quarters of 2020 and continuing into the first quarter of 2021. Business activity, especially lending, declined throughout 2020 and into first quarter this year. In certain business lines, FHN reduced or stopped new lending because of the pandemic.

~~In the fourth quarter of 2020, two extremely effective vaccines were approved~~net interest margin. Inflation in the U.S. Administration of those vaccines began late in 2020, nationwide but on a narrowly targeted basis. In the first quarter of 2021, vaccine production and distribution increased, and a third vaccine was approved in the U.S. Public vaccination in the U.S. has acceleratedrose significantly during the first four months of 2021. In many of FHN's markets, COVID-19 restrictions at least partially were eased by the end of March or during April, and FHN believes further easing is likely in the rest of 2021. COVID-19 restrictions still had a substantial impact on FHN and its clients in the first quarter of 2021 but ~~FHN expects those impacts~~was viewed as transitory, driven by temporary supply-chain shortages coupled with strong demand as unemployment fell while government cash transfers to ~~diminish over the rest of this year as the vaccinated percentage~~broad sections of the ~~U.S. population continues~~public continued.

In 2022 to ~~climb. Within~~date, with the ~~U.S. economy, broadly speaking, manufacturing has largely recovered while services continue~~economic effects of the pandemic receding and inflation continuing strongly, the Federal Reserve reversed its easing policy by reducing ("tapering") its asset purchases and starting to ~~lag significantly, especially in hospitality~~increase short-term interest rates. The Federal Reserve's most recent public comments indicate that: asset purchases will stop shortly; the Federal Reserve's holdings of assets will be reduced through attrition; and ~~leisure.~~

~~Risk of resurgence remains as new virus variants continue~~short-term rates are expected to be identified around the world. As a result, FHN continues to closely monitor the pandemic and its effects on clients, especially credit quality, on FHN's communities, and on the financial markets. FHN continues to reach out to clients to discuss challenges and solutions, to provide line draws and new extensions to existing clients, to provide support for small businesses through the Paycheck Protection Program and other stimulus programs, and to provide lending and deposit assistance through deferrals and waived fees.

~~LIBOR Reform~~

~~In 2017, the Chief Executive of the United Kingdom Financial Conduct Authority, which regulates the London Inter-Bank Offered Rate (LIBOR), announced~~raised several more times during 2022. The Federal Reserve has not indicated that it intends to ~~halt persuading or compelling banks~~sell assets to ~~submit~~reduce its holdings more quickly, but it could decide to take such action later. In any case, these actions are intended to increase both short- and long-term interest rates ~~for~~quickly. The primary driver of this change in viewpoint is the ~~calculation~~persistence and strength of ~~LIBOR after 2021.~~

~~In March 2021,~~inflation in the ~~United Kingdom’s Financial Conduct Authority (the “FCA”), the governmental regulator of the administrator of LIBOR, announced that~~ U.S. ~~Dollar LIBOR will no longer be representative as of:~~

•~~One week and two month USD LIBOR after December 31, 2021; and~~

•~~All other USD LIBOR tenors (e.g., overnight, 1-month, 3-month, 6-month and 12-month tenors) after June 30, 2023.~~

Until first quarter 2022, there had been no reported quarterly contraction in the U.S. economy since 2020. The first quarter contraction was mild (1.4%, annualized). If contraction persists in the second quarter, the U.S.

technically would be in recession. The risk of recession, or an actual recessionary situation, may affect future actions by the Federal Reserve since raising interest rates tends to slow the economy and increase recession risk.

During this still-ongoing transitional period, the yield curve has flattened and modestly inverted at times. For example, overnight rates were higher than one- and two-month rates. Unusual yield curve effects, including inversion, may continue. A traditional measure of inversion—when the two-year rate is higher than the ten-year rate for a sustained period of time—has not yet occurred, though several brief inversions occurred in March and April this year. Traditional yield curve inversion is viewed, with statistical support, as a harbinger of economic recession.

As a result of recession risk, coupled with the uncertainties associated with the war in eastern Europe, financial markets world-wide have been volatile in 2022 with, in many asset classes and business sectors, generally lower valuations currently than at year-end 2021.

FHN cannot predict exactly when or how much short-term rates will be raised, nor how market-driven long-term rates will behave, nor how those actions may affect financial markets, during the remainder of 2022. Though rates have risen this year, they continue to remain low by historical standards.

In several respects FHN is likely to benefit from rising rates, as long as the rise in lending rates outpaces the inevitable rise in deposit and other funding rates. One area, however, already has been hurt. The general increase in interest rates in 2022 has pushed home mortgage rates in the U.S. higher. FHN's direct mortgage lending, lending to mortgage companies, and title insurance activities have seen business decline in 2022. Part of that decline likely is seasonal, as first quarter often is weaker than the warmer months in the U.S., but part likely is driven by higher rates coupled with still-high property valuations in many U.S. markets. If mortgage rates continue to rise, FHN's revenues and earnings from


~~FIRST HORIZON CORPORATION~~			9693			~~1Q21~~1Q22 FORM 10-Q REPORT


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those areas likely will continue to be muted compared with 2021.

War in Eastern Europe

In late February, 2022, the Russian military invaded Ukraine. Russian forces occupied Ukrainian territory and cities, some of which have since been liberated by Ukrainian forces. Much of Europe and the rest of the world, including the U.S., has imposed economic sanctions on Russia for its attack, its ongoing military campaign resulting in substantial civilian casualties, and the manner in which it has prosecuted the war which, reportedly, has significantly violated several international conventions and treaties.

The war and sanctions resulted in global oil and gas prices rising precipitously in 2022, along with the prices of

several other commodities exported by Russia, Ukraine, or both, including grains and vegetable oils. These effects likely have contributed significantly to a change in the Federal Reserve's views of inflation in the U.S., and to fears of a possible economic recession, all discussed in Inflation, Recession, and Federal Reserve Policy immediately above. Also, several U.S. and European multi-national companies have pulled operations and assets out of Russia and parts of Ukraine, compounding the economic impact of the war on the global economy.

COVID-19 Pandemic

The ~~administrator~~COVID-19 pandemic caused extraordinary disruption in 2020 that negatively impacted the economy and business activity, especially lending (other than lending related to home mortgages). During 2021 and thus far in 2022, FHN saw the lending pipeline improve in several areas (unrelated to home mortgages) as COVID-19 restrictions were partially or fully eased in most of FHN's markets. Despite variants of the COVID-19 virus triggering reinstatement of some restrictions in some markets, broadly speaking, FHN expects the impact of COVID-19

restrictions in its markets to continue to diminish over the rest of this year. However, the risk of resurgence remains.

In late March 2022, the pandemic began a resurgence in parts of China, prompting the Chinese government to lock down Shanghai, China's most populous city and a major international seaport. The lockdown has not yet significantly impacted the global economy, but soon could if it continues, illustrating how COVID resurgence outside of the U.S. can affect the U.S. and FHN.

LIBOR & Reference Rate Reform

LIBOR

The London Inter-Bank Offered Rate ("LIBOR") for many years was the most widely used reference rate in the world. A large but declining portion of FHN's floating rate loans use LIBOR, denominated in U.S. Dollars ("USD"), as the reference rate to determine the interest rate paid by the client/borrower. In addition, certain floating-rate securities issued by FHN use USD LIBOR as the reference rate.

LIBOR is based on a mix of transaction-based data and expert judgment about market conditions. It is published in different tenors, which are time periods such as 1-week, 1-month, 12-month, etc.

LIBOR Discontinuance

About a decade ago, evidence emerged that some members of the panel that set LIBOR may have manipulated the published LIBOR rates rather than using strictly good-faith judgments. Several banks were fined.

In 2017, the Chief Executive of the United Kingdom Financial Conduct Authority (the “FCA”)—the governmental regulator of LIBOR—announced that it intended to halt persuading or compelling banks to submit

rates for the calculation of LIBOR ~~thereafter~~after 2021. In 2021, the FCA announced that tenors of USD LIBOR ~~will cease to~~would no longer be published ~~immediately~~as follows:

•One week and 2-month USD LIBOR would not be published after ~~the dates set out above.~~December 31, 2021; and

•All other USD LIBOR tenors (e.g., overnight, 1-month, 3-month, 6-month and 12-month tenors) would not be published after June 30, 2023.

~~Previous to these announcements, the Board of Governors of~~U.S. Regulatory Position

In 2020, the Federal Reserve, ~~System,~~ the ~~Office of the Comptroller of the Currency,~~OCC, and the ~~Federal Deposit Insurance Corporation issued SR 20-27 to encourage~~FDIC jointly encouraged U.S. banks to transition away from ~~U.S. dollar~~ LIBOR for new contracts as soon as practicable and, in any event, by December 31, 2021. They noted that entering into new contracts that use LIBOR as a reference rate after December 31, 2021 would create safety and soundness risks. As

Alternatives to LIBOR

LIBOR became the market-preferred reference rate because it was perceived by lenders and borrowers as being superior to alternatives in a ~~result,~~wide range of circumstances.Now that the origination of LIBOR-indexed


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loans has ended, no single alternative reference rate has replaced LIBOR for USD transactions. Instead, a number of different reference rates are being used in different circumstances. These include:

•SOFR. The Alternative Reference Rates Committee (“ARRC”) is a group of private-market and financial regulator participants convened by the Federal Reserve and the New York Federal Reserve Bank to help ensure a successful transition from USD LIBOR to a more robust reference rate. The ARRC has recommended the Secured Overnight Financing Rate (“SOFR”) as its preferred alternative. SOFR resets daily and is based on actual transaction data for the U.S. Treasury repurchase market. Accordingly, SOFR represents a riskless secured overnight rate.

•CME Term SOFR. Published by CME Group, Term SOFR is a forward-looking rate, with 1-month, 3-month and 6-month tenors, and is based on SOFR futures contracts. The ARRC has recommended conventions for Term SOFR rates and has recommended CME Group as the administrator for Term SOFR.

•AMERIBOR.The American Interbank Offered Rate (“AMERIBOR”) Index is produced by the American Financial Exchange. AMERIBOR is based on actual transaction data involving credit decisions by many financial institutions, on an unsecured basis.

•BSBY. The Bloomberg short-term bank yield index ("BSBY") is a proprietary rate index calculated and published by Bloomberg Index Services Limited. BSBY is based on actual transaction data involving unsecured credit.

•Prime. Although traditional prime rates (with each bank setting its own) are not likely to regain the prominence they had decades ago when U.S. banks were much smaller and the industry was more fragmented, for some clients and products banks may increase their usage of prime rates.

The alternatives listed above were made available to the majority of FHN’s commercial clients starting in November 2021. In accordance with the U.S. regulatory position, FHN ceased entering into new LIBOR based contracts as of December 31, 2021. Other alternative reference rates are being developed and FHN may consider them at a future time.

Each alternative reference rate has advantages and disadvantages compared with other alternatives in various circumstances. Despite being supported by the Federal Reserve's ARRC, SOFR may not gain the level of market ~~participants~~acceptance and usage that USD LIBOR enjoyed within the U.S. Key aspects of SOFR that support this view are: (a) SOFR fundamentally is an overnight rate, and so is not easily or reliably translated into typical LIBOR tenors; and (b) SOFR is both secured and riskless, and so does not necessarily track a bank's cost of funds very well. For a

bank, it is critical to avoid significant mismatches over time between its (variable) cost of funds and its (variable) interest income. Term SOFR attempts to address some of these shortcomings, but not all of them.

All of the alternative reference rates selected by FHN to date meet the International Organization of Securities Commissions ("IOSCO") Principles for Financial Benchmarks, as affirmed by the rate administrator and/or an independent auditor. While banking regulators have stated that banks are free to choose the index rates they offer clients, some public sector officials have urged caution in using the new credit sensitive alternative reference rates, primarily due to the robustness of underlying data used to derive the rates. More specifically, there is concern of an “inverted pyramid” effect where a large number of financial contracts could be priced using an index derived from a relatively low volume of transactions. In an interagency statement on October 20, 2021, U.S. banking regulatory agencies noted that “supervised institutions should understand how their chosen reference rate is constructed and be aware of any fragilities associated with that rate and the markets that underlie it”. IOSCO has also warned of the potential for the “inverted pyramid” problem and will ~~be required to transition away from LIBOR beginning in 2021.~~ monitor how the IOSCO label is used by administrators.

FHN is ~~not currently able~~monitoring the credit sensitive reference rates and regulatory guidance around use of such rates. FHN plans to ~~predict the impact~~limit use of credit sensitive rates to commercial loans ( approximately 2% of global USD LIBOR market) and related customer swaps (pending development of derivatives markets for these rates). Additionally, FHN expects that ~~the~~each financial contract will contain fallback language to guide transition from a credit sensitive rate to an alternative should that action be deemed necessary in the future.

FHN's Actions to Date & Transition Plans

Starting in 2019, FHN modernized the fallback language used in its loan documentation to better handle how floating rate loans would be re-set if LIBOR ~~will have~~ceased to be published during the loan term.

In the fourth quarter of 2021, FHN ceased using USD LIBOR for new lending and renegotiated terms with clients whose loans are based on ~~FHN; however, because~~ 1-week or 2-month USD LIBOR, which ceased publication at the end of 2021. Only a small portion of FHN's clients had such loans.

On the consumer side, FHN began transitioning from LIBOR-based adjustable rate mortgages ("ARMS") to SOFR-based ARMs in November 2021, and no longer offers LIBOR-based ARMs. SOFR has emerged as a market standard for ARMs in the U.S. and is the conforming convention for Fannie Mae and Freddie Mac.

For all products, FHN developed a go-to-market strategy which included pricing considerations, associate training, and client communications. All required systems, processes, and reporting were updated to accommodate


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the transition. FHN continues to monitor developments related to each of the alternative reference rates it currently offers. FHN's plans may change to meet evolving market conditions and preferences.

FHN has ~~instruments~~established a LIBOR Transition Office to assist associates in working with their clients to re-negotiate terms of loan and derivative contracts that extend past the June 30, 2023 cessation date for the remaining USD LIBOR tenors noted above.

While FHN has exposure to LIBOR in various contracts (e.g. securities, derivatives), FHN's primary exposure to LIBOR is in floating rate ~~terms based on~~ loans to customers and derivative contracts issued to customers through FHN Financial. Below is a summary of these exposures as of March 31, 2022:

Table I.2.23

LIBOR EXPOSURES



(Dollars in billions)	As of March 31, 2022		Mature after June 2023
Commercial loans (a)	$	22	$	16
Consumer loans (a)	3		3
Customer swaps (b)	10		10

(a) Amounts represent outstanding loan balances as of March 31, 2022.

(b) FHN ~~may experience increases in interest, dividends, and other costs relative~~has entered into offsetting upstream transactions with dealers to ~~these instruments subsequent to 2021. Additionally, the transition from LIBOR could impact or change FHN’s hedge accounting practices.~~offset its market risk exposure.

FHN ~~has initiated efforts~~is developing a plan to 1) develop an inventory of affected loans, securities, and derivatives, 2) evaluate and assess modifications as needed to address loans outstanding at the time of LIBOR discontinuance, 3) obtain an understanding of the potential effects for applicable securities and derivatives, 4) assess revisions to systems, processes, and pricing needed to implement alternative reference rates, and 5) update fallback language for all new loans that reference LIBOR.amend existing LIBOR-based derivative instruments.

Financial Accounting Aspects

In ~~March~~ 2020, the FASB issued ASU 2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which provides several optional expedients and exceptions to ease the potential burden in accounting for reference rate

reform. The scope of ASU 2020-04 was expanded ~~with the January~~in 2021 ~~issuance of~~with ASU 2021-01, "Scope". Refer to the Accounting Changes ~~Issued but Not Currently Effective~~With Extended Transition Periods section of Note 1 - Basis of Presentation and Accounting Policies for additional information. ~~Additionally,~~

In April 2022, the FASB proposed to extend the relief under Topic 848 (Reference Rate Reform) by two years, from December 31, 2022 to December 31, 2024.

U.S. Tax Accommodation

On December 30, 2021, the IRS ~~has~~ released final guidance that is intended to facilitate the transition of existing contracts from LIBOR to new reference rates without triggering modification accounting or taxable exchange treatment for those contracts. This guidance specifies what must be met in order to qualify for the beneficial transition approach and FHN is considering this guidance in its transition plans.

~~Limited Data Security Incident~~

In mid-April, FHN became aware of a data security incident affecting a limited number of customer accounts. Based on its ongoing investigation, FHN determined that an unauthorized party had obtained login credentials from an unknown source and attempted access to client accounts. Using the credentials and exploiting a vulnerability in third-party security software, the unauthorized party gained unauthorized access to under 200 on-line client bank accounts, had access to personal information in those accounts, and fraudulently obtained an aggregate of less than $1 million from some of those accounts. FHN has remediated the software vulnerability, reset the passwords for the identified accounts, is working with the affected clients to close existing accounts and open new ones, has reimbursed clients for the stolen funds, and has notified the appropriate regulators and enforcement authorities. Based on its ongoing assessment of the incident to date, FHN does not believe that this event will have a material adverse effect on its business, results of operations, or financial condition.

Critical Accounting Policies and Estimates

FHN has made no significant changes in its critical accounting policies and estimates from those disclosed in its ~~2020~~2021 Annual Report on Form ~~10-K.~~10-K, as amended.

Accounting Changes ~~With Extended Transition Periods~~

Refer to Note 1 – Basis of Presentation and Accounting Policies for a detail of accounting changes with extended transition periods and accounting changes issued but not currently effective, which section is incorporated into MD&A by this reference.


~~FIRST HORIZON CORPORATION~~			9796			~~1Q21~~1Q22 FORM 10-Q REPORT

~~Non-GAAP Information~~PART I, ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)

Table of Contents

Non-GAAP Information

Table ~~20—Non-GAAP to~~I.2.24

NON-GAAP TO GAAP ~~Reconciliation~~


TN		62-0803242
(State or other jurisdiction incorporation of organization)		(IRS Employer Identification No.)

165 Madison Avenue
Memphis,	Tennessee	38103
(Address of principal executive office)		(Zip Code)


Class						Outstanding on ~~March 31, 2021~~April 29, 2022
Common Stock, $.625 par value						~~552,374,489~~534,875,783



Glossary of Acronyms and Terms			1
~~Forward Looking~~Forward-Looking Statements			3
Non-GAAP Information			45

Part I. Financial Information			56
Item 1. Financial Statements			56
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			6866
Item 3. Quantitative and Qualitative Disclosures about Market Risk			9998
Item 4. Controls and Procedures			9998

Part II. Other Information			~~100~~99
Item 1. Legal Proceedings			~~100~~99
Item 1A. Risk Factors			~~100~~99
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			~~100~~99
Item 3. Defaults Upon Senior Securities			100
Item 4. Mine Safety Disclosures			100
Item 5. Other Information			100
Item 6. Exhibits			~~101~~100









Signatures			~~103~~101


ACL			Allowance for credit losses
~~ADR~~			~~Average daily revenue~~
AFS			Available for sale
AIR			Accrued interest receivable
ALCO			Asset/Liability Committee
ALLL			Allowance for loan and lease losses
ALM			Asset/liability management
AMERIBOR			American Interbank Offered Rate
AOCI			Accumulated other comprehensive income
ARRC			Alternative Reference Rates Committee
ASC			FASB Accounting Standards Codification
Associate			Person employed by FHN
ASU			Accounting Standards Update
Bank			First Horizon Bank
BOLI			Bank-owned life insurance
BSBY			Bloomberg short-term bank yield index
C&I			Commercial, financial, and industrial loan portfolio
CARES Act			Coronavirus Aid, Relief, and Economic Security Act
CBF			Capital Bank Financial
~~CCAR~~			~~Comprehensive Capital Analysis and Review~~
CD			~~Certificate of deposit~~
CECL			Current expected credit loss
CEO			Chief Executive Officer
~~CFPB~~			~~Consumer Financial Protection Bureau~~
CMO			Collateralized mortgage obligations
Company			First Horizon Corporation
Corporation			First Horizon Corporation
~~CRA~~			~~Community Reinvestment Act~~
CRE			Commercial Real Estate loan portfolio
CRMC			Credit Risk Management Committee
~~DSCR~~			~~Debt service coverage ratios~~
DTA			Deferred tax asset
~~DTI~~			~~Debt-to-income~~
DTL			Deferred tax liability
EPS			Earnings per share
~~ESOP~~Fannie Mae			~~Employee stock ownership plan~~Federal National Mortgage Association
FASB			Financial Accounting Standards Board
FDIC			Federal Deposit Insurance Corporation



Federal Reserve			Federal Reserve Board
~~FFP~~			~~Federal funds purchased~~
~~FFS~~			~~Federal funds sold~~
FHA			Federal Housing Administration
FHLB			Federal Home Loan Bank
FHLMC / Freddie Mac			~~Federal Home Loan Mortgage Corporation~~
FHN			First Horizon Corporation
FHNF			FHN Financial; FHN's fixed income division
FICO			Fair Isaac Corporation
~~FINRA~~			~~Financial Industry Regulatory Authority~~
~~FNMA / Fannie Mae~~			~~Federal National Mortgage Association~~
First Horizon			First Horizon Corporation


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


FRB			Federal Reserve Bank or the Federal Reserve Board
~~FTBNA~~Freddie Mac			~~First Tennessee Bank National Association (former name of the Bank)~~Federal Home Loan Mortgage Corporation
FTE			Fully taxable equivalent
~~FTHC~~			~~First Tennessee Housing Corporation~~
~~FTNF~~			~~FTN Financial (former name of FHNF)~~
~~FTNMC~~			~~First Tennessee New Markets Corporation~~
FTRESC			FT Real Estate Securities Company, Inc.
GAAP			Generally accepted accounting principles (U.S.)
GNMA			Government National Mortgage Association or Ginnie Mae
GSE			Government sponsored enterprises, in this report references Fannie Mae and Freddie Mac
HELOC			Home equity line of credit
HFS			Held for Sale
HTM			Held to maturity
~~HUD~~			~~Department of Housing and Urban Development~~
IBKC			IBERIABANK Corporation
IBKC merger			FHN's merger of equals with IBKC that closed July 2020
ISDA			International Swap and Derivatives Association
IRS			Internal Revenue Service


LGD			Loss given default
LIBOR			London Inter-Bank Offered Rate
LIHTC			Low Income Housing Tax Credit
LLC			Limited Liability Company
LMC			Loans to mortgage companies
LOCOM			Lower of cost or market
LRRD			Loan Rehab and Recovery Department
LTV			Loan-to-value
MBS			Mortgage-backed securities
MD&A			Management’s Discussion and Analysis of Financial Condition and Results of Operations
~~MSR~~			~~Mortgage servicing rights~~
~~MSRB~~			~~Municipal Securities Rulemaking Board~~
NAICS			North American Industry Classification System
NII			Net interest income
~~NIM~~			~~Net interest margin~~
NM			Not meaningful
NMTC			New Market Tax Credit
~~NOL~~			~~Net operating loss~~
NPA			Nonperforming asset
Non-PCD			Non-Purchased Credit Deteriorated Financial Assets
NPL			Nonperforming loan
~~NSF~~			~~Non-sufficient funds~~
~~OCC~~			~~Office of the Comptroller of the Currency~~
~~OIS~~			~~Overnight indexed swap~~
OREO			Other Real Estate Owned
~~OTC~~			~~One-time close, a mortgage product which allowed simplified conversion of a construction loan to permanent financing~~
~~OTTI~~			~~Other than temporary impairment~~
PCAOB			Public Company Accounting Oversight Board


PCD			Purchased ~~Credit Deteriorated Financial Assets~~credit deteriorated financial assets
PCI			Purchased credit impaired
PD			Probability of default
PM			Portfolio managers
PPP			Paycheck Protection Program
PSU			Performance Stock Unit
RE			Real estate
RM			Relationship managers
ROA			Return on assets
~~ROCE~~			~~Return on average common shareholders' equity~~


~~ROTCE~~			~~Return on tangible common equity~~
~~ROU~~			~~Right-of-use~~
RPL			Reasonably Possible Loss
~~RSU~~			~~Restricted stock unit~~
~~RULC~~			~~Reserve for unfunded lending commitments~~
~~RWA~~			~~Risk-weighted assets~~
SBA			Small Business Administration
SEC			Securities and Exchange Commission
SOFR			Secure Overnight Funding Rate
SVaR			Stressed Value-at-Risk
TD			The Toronto-Dominion Bank
TATDBNA			~~Tangible assets~~TD Bank, N.A.
~~TCE~~TD-US			~~Tangible common equity~~TD Bank US Holding Company
TD Merger Agreement			Merger agreement between FHN, TD, TD-US, and a TD-US subsidiary
Proposed TD Merger			The merger transactions contemplated by the TD Merger Agreement
TDR			Troubled Debt Restructuring
TRUP			Trust preferred loan
UPB			Unpaid principal balance
USDA			United States Department of Agriculture
VaR			Value-at-Risk
VIE			Variable Interest Entities
we / us / our			First Horizon Corporation


FORWARD-LOOKING STATEMENTS AND NON-GAAP INFORMATION
Table of Contents


Consolidated Balance Sheets (unaudited)			67

Consolidated Statements of Income (unaudited)			78

Consolidated Statements of Comprehensive Income (unaudited)			810

Consolidated Statements of Changes in Equity (unaudited)			911

Consolidated Statements of Cash Flows (unaudited)			1012

Notes to the Consolidated Financial Statements (unaudited)			1113
Note 1 Basis of Presentation and Accounting Policies			1113

Note 2 ~~Acquisitions and Divestitures~~Investment Securities			1215
Note 3 ~~Investment Securities~~Loans and Leases			1418
Note 4 ~~Loans and Leases~~			17
~~Note 5~~ Allowance for Credit Losses			2526
Note 5 Mortgage Banking Activity			28
Note 6 ~~Mortgage Banking Activity~~			27
~~Note 7~~ Goodwill and Other Intangible Assets			2829

Note 87 Preferred Stock			29
~~Note 9 Components of Other Comprehensive Income (Loss)~~			30
Note ~~10 Earnings Per Share~~8 Components of Other Comprehensive Income (Loss)			31
Note ~~11 Contingencies and Other Disclosures~~9 Earnings Per Share			32
Note 12 10 Contingencies and Other Disclosures			R33
~~etirement~~Note 11 Retirement Plans			35
Note 1312 Business Segment Information			36
Note 1413 Variable Interest Entities			39
Note 1514 Derivatives			42
Note 1615 Master Netting and Similar Agreements - Repurchase, Reverse Repurchase, and Securities Borrowing Transactions			49
Note 1716 Fair Value of Assets and Liabilities			51
~~Note 18 Other Events~~			67


		(Unaudited)		December 31,			(Unaudited)		December 31,
		March 31,					March 31,
(Dollars in millions, except per share amounts)	(Dollars in millions, except per share amounts)	2021		2020		(Dollars in millions, except per share amounts)	2022		2021
Assets	Assets					Assets
Cash and due from banks	Cash and due from banks	$	1,169	$	1,203	Cash and due from banks	$	1,225	$	1,147
Interest-bearing deposits with banks	Interest-bearing deposits with banks	11,635		8,351		Interest-bearing deposits with banks	13,548		14,907
Federal funds sold and securities purchased under agreements to resell	Federal funds sold and securities purchased under agreements to resell	520		445		Federal funds sold and securities purchased under agreements to resell	640		641
Trading securities	Trading securities	1,076		1,176		Trading securities	1,823		1,601
Securities available for sale at fair value	Securities available for sale at fair value	8,351		8,047		Securities available for sale at fair value	9,242		8,707
Loans held for sale (including $449 and $405 at fair value, respectively)		811		1,022
Loans and leases (including $17 and $16 at fair value, respectively)		58,600		58,232
Securities held to maturity (fair value of $650 and $705, respectively)						Securities held to maturity (fair value of $650 and $705, respectively)	701		712
Loans held for sale (including $193 and $258 at fair value, respectively)						Loans held for sale (including $193 and $258 at fair value, respectively)	1,014		1,172
Loans and leases						Loans and leases	55,012		54,859
Allowance for loan and lease losses	Allowance for loan and lease losses	(914)		(963)		Allowance for loan and lease losses	(622)		(670)
Net loans and leases	Net loans and leases	57,686		57,269		Net loans and leases	54,390		54,189
Premises and equipment	Premises and equipment	719		759		Premises and equipment	669		665
Goodwill	Goodwill	1,511		1,511		Goodwill	1,511		1,511
Other intangible assets	Other intangible assets	339		354		Other intangible assets	285		298
Other assets	Other assets	3,696		4,072		Other assets	3,612		3,542
Total assets	Total assets	$	87,513	$	84,209	Total assets	$	88,660	$	89,092

Liabilities	Liabilities					Liabilities
Noninterest-bearing deposits	Noninterest-bearing deposits	$	25,046	$	22,173	Noninterest-bearing deposits	$	28,051	$	27,883
Interest-bearing deposits	Interest-bearing deposits	48,120		47,809		Interest-bearing deposits	46,063		47,012
Total deposits	Total deposits	73,166		69,982		Total deposits	74,114		74,895
Trading liabilities	Trading liabilities	454		353		Trading liabilities	513		426
Short-term borrowings	Short-term borrowings	2,203		2,198		Short-term borrowings	1,719		2,124
Term borrowings	Term borrowings	1,671		1,670		Term borrowings	1,591		1,590
Other liabilities	Other liabilities	1,712		1,699		Other liabilities	2,027		1,563
Total liabilities	Total liabilities	79,206		75,902		Total liabilities	79,964		80,598

Equity	Equity					Equity
Preferred stock, Non-cumulative perpetual, no par value; authorized 5,000,000 shares; issued 26,250 shares		470		470
Common stock, $0.625 par value; authorized 700,000,000 shares; issued 552,374,489 and 555,030,652 shares, respectively		345		347
Preferred stock, Non-cumulative perpetual, no par value; authorized 5,000,000 shares; issued 31,686 and 26,750 shares, respectively						Preferred stock, Non-cumulative perpetual, no par value; authorized 5,000,000 shares; issued 31,686 and 26,750 shares, respectively	1,014		520
Common stock, $0.625 par value; authorized 700,000,000 shares; issued 534,587,149 and 533,576,766 shares, respectively						Common stock, $0.625 par value; authorized 700,000,000 shares; issued 534,587,149 and 533,576,766 shares, respectively	334		333
Capital surplus	Capital surplus	5,036		5,074		Capital surplus	4,769		4,743
Retained earnings	Retained earnings	2,402		2,261		Retained earnings	2,996		2,891
Accumulated other comprehensive loss, net	Accumulated other comprehensive loss, net	(241)		(140)		Accumulated other comprehensive loss, net	(712)		(288)
FHN shareholders' equity	FHN shareholders' equity	8,012		8,012		FHN shareholders' equity	8,401		8,199
Noncontrolling interest	Noncontrolling interest	295		295		Noncontrolling interest	295		295
Total equity	Total equity	8,307		8,307		Total equity	8,696		8,494
Total liabilities and equity	Total liabilities and equity	$	87,513	$	84,209	Total liabilities and equity	$	88,660	$	89,092




	Three Months Ended March 31,
(Dollars in millions, except per share data; shares in thousands) (Unaudited)	2022		2021
Interest income
Interest and fees on loans and leases	$	444	$	507
Interest and fees on loans held for sale	10		7
Interest on investment securities	38		29
Interest on trading securities	11		7
Interest on other earning assets	7		2
Total interest income	510		552
Interest expense
Interest on deposits	11		24
Interest on trading liabilities	2		1
Interest on short-term borrowings	1		1
Interest on term borrowings	17		18
Total interest expense	31		44
Net interest income	479		508
Provision for credit losses	(40)		(45)
Net interest income after provision for credit losses	519		553
Noninterest income
Fixed income	73		126
Deposit transactions and cash management	44		42
Brokerage, management fees and commissions	24		20
Mortgage banking and title income	22		53
Card and digital banking fees	20		17
Trust services and investment management	13		12
Other service charges and fees	13		10
Securities gains (losses), net	6		—


Other income	14		18
Total noninterest income	229		298
Noninterest expense
Personnel expense	280		318
Net occupancy expense	32		37
Computer software	29		28
Legal and professional fees	23		14
Operations services	20		16
Contract employment and outsourcing	19		14
Amortization of intangible assets	13		14
Equipment expense	11		11
Advertising and public relations	11		4
Communications and delivery	10		9

Other expense	45		79
Total noninterest expense	493		544
Income before income taxes	255		307
Income tax expense	57		71
Net income	$	198	$	236
Net income attributable to noncontrolling interest	3		3
Net income attributable to controlling interest	$	195	$	233
Preferred stock dividends	8		8
Net income available to common shareholders	$	187	$	225
Basic earnings per common share	$	0.35	$	0.41
Diluted earnings per common share	$	0.34	$	0.40


10-Q REPORT TABLE OF CONTENTS


GLOSSARY OF ACRONYMS & TERMS
Table of Contents


GLOSSARY OF ACRONYMS & TERMS
Table of Contents


Weighted average common shares	533,218	552,249
Diluted average common shares	549,809	556,788



	Three Months Ended March 31,
(Dollars in millions, except per share data; shares in thousands) (Unaudited)	2021		2020
Interest income
Interest and fees on loans and leases	$	507	$	327
Interest and fees on loans held for sale	7		7
Interest on securities available for sale	29		27


Interest on trading securities	7		13
Interest on other earning assets	2		4
Total interest income	552		378
Interest expense
Interest on deposits	24		54
Interest on trading liabilities	1		3
Interest on short-term borrowings	1		10
Interest on term borrowings	18		8
Total interest expense	44		75
Net interest income	508		303
Provision for credit losses	(45)		154
Net interest income after provision for credit losses	553		149
Noninterest income
Fixed income	126		96
Mortgage banking and title income	53		2
Deposit transactions and cash management	42		30
Brokerage, management fees and commissions	20		16
Trust services and investment management	12		7
Bankcard income	11		7


Other income	34		16
Total noninterest income	298		174
Noninterest expense
Personnel expense	318		183
Net occupancy expense	37		20
Computer software	28		16
Legal and professional fees	14		9
Operations services	16		12

Equipment expense	11		9
Amortization of intangible assets	14		5
Other expense	106		48
Total noninterest expense	544		302
Income before income taxes	307		21
Income tax expense	71		5
Net income	236		16
Net income attributable to noncontrolling interest	3		3
Net income attributable to controlling interest	233		13
Preferred stock dividends	8		1
Net income available to common shareholders	225		12
Basic earnings per common share	$	0.41	$	0.04
Diluted earnings per common share	$	0.40	$	0.04
Weighted average common shares	552,249		311,597
Diluted average common shares	557,532		313,170



	Three Months Ended March 31,
(Dollars in millions) (Unaudited)	2022		2021
Net income	$	198	$	236
Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on securities available for sale	(404)		(103)
Net unrealized gains (losses) on cash flow hedges	(21)		(2)
Net unrealized gains (losses) on pension and other postretirement plans	1		4
Other comprehensive income (loss)	(424)		(101)
Comprehensive income (loss)	(226)		135
Comprehensive income attributable to noncontrolling interest	3		3
Comprehensive income (loss) attributable to controlling interest	$	(229)	$	132
Income tax expense (benefit) of items included in other comprehensive income:
Net unrealized gains (losses) on securities available for sale	$	(130)	$	(33)
Net unrealized gains (losses) on cash flow hedges	(7)		(1)
Net unrealized gains (losses) on pension and other postretirement plans	1		1




Three months ended March 31, 2021
	Preferred Stock			Common Stock
(Dollars in millions, except per share data; shares in thousands) (unaudited)	Shares	Amount		Shares	Amount		Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Income (Loss) (a)		Noncontrolling Interest		Total
Balance, December 31, 2020	26,250	$	470	555,031	$	347	$	5,074	$	2,261	$	(140)	$	295	$	8,307


Net income	—	—		—	—		—		233		—		3		236
Other comprehensive income (loss)	—	—		—	—		—		—		(101)		—		(101)
Comprehensive income (loss)	—	—		—	—		—		233		(101)		3		135
Cash dividends declared:
Preferred stock	—	—		—	—		—		(8)		—		—		(8)
Common stock ($0.15 per share)	—	—		—	—		—		(84)		—		—		(84)
Common stock repurchased (b)	—	—		(3,864)	(2)		(60)		—		—		—		(62)
Common stock issued for:
Stock options and restricted stock - equity awards	—	—		1,208	0		12		—		—		—		12
Stock-based compensation expense	—	—		—	—		10		—		—		—		10
Dividends declared - noncontrolling interest of subsidiary preferred stock	—	—		—	—		—		—		—		(3)		(3)

Balance, March 31, 2021	26,250	$	470	552,375	$	345	$	5,036	$	2,402	$	(241)	$	295	$	8,307


Three months ended March 31, 2020

Three Months Ended March 31, 2022																		Three Months Ended March 31, 2022
		Preferred Stock			Common Stock														Preferred Stock			Common Stock
(Dollars in millions, except per share data; shares in thousands) (unaudited)	(Dollars in millions, except per share data; shares in thousands) (unaudited)	Shares	Amount		Shares	Amount		Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Income (Loss) (a)		Noncontrolling Interest		Total		(Dollars in millions, except per share data; shares in thousands) (unaudited)	Shares	Amount		Shares	Amount		Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Income (Loss) (a)		Noncontrolling Interest		Total
Balance, December 31, 2019		1,000	$	96	311,469	$	195	$	2,931	$	1,798	$	(239)	$	295	$	5,076
Adjustment to reflect adoption of ASU 2016-13		—	—		—	—		—		(96)		—		—		(96)
Beginning balance, as adjusted		1,000	96		311,469	195		2,931		1,702		(239)		295		4,980
Balance, December 31, 2021																		Balance, December 31, 2021	26,750	$	520	533,577	$	333	$	4,743	$	2,891	$	(288)	$	295	$	8,494

Net income	Net income	—	—		—	—		—		13		—		3		16		Net income	—	—		—	—		—		195		—		3		198
Other comprehensive income (loss)	Other comprehensive income (loss)	—	—		—	—		—		—		104		—		104		Other comprehensive income (loss)	—	—		—	—		—		—		(424)		—		(424)
Comprehensive income (loss)	Comprehensive income (loss)	—	—		—	—		—		13		104		3		120		Comprehensive income (loss)	—	—		—	—		—		195		(424)		3		(226)
Cash dividends declared:	Cash dividends declared:																	Cash dividends declared:
Preferred stock ($1,550 per share)		—	—		—	—		—		(1)		—		—		(1)
Preferred stock																		Preferred stock	—	—		—	—		—		(8)		—		—		(8)
Common stock ($0.15 per share)	Common stock ($0.15 per share)	—	—		—	—		—		(48)		—		—		(48)		Common stock ($0.15 per share)	—	—		—	—		—		(82)		—		—		(82)
Preferred stock issuance (4,936 shares issued at 100,000 per share)																		Preferred stock issuance (4,936 shares issued at 100,000 per share)	4,936	494		—	—		—		—		—		—		494
Common stock repurchased	Common stock repurchased	—	—		(141)	0		(2)		—		—		—		(2)		Common stock repurchased	—	—		(120)	—		(2)		—		—		—		(2)
Common stock issued for:	Common stock issued for:																	Common stock issued for:
Stock options and restricted stock - equity awards		—	—		652	0		4		—		—		—		4
Stock options exercised and restricted stock awards																		Stock options exercised and restricted stock awards	—	—		1,130	1		14		—		—		—		15
Stock-based compensation expense	Stock-based compensation expense	—	—		—	—		7		—		—		—		7		Stock-based compensation expense	—	—		—	—		14		—		—		—		14
Dividends declared - noncontrolling interest of subsidiary preferred stock	Dividends declared - noncontrolling interest of subsidiary preferred stock	—	—		—	—		—		—		—		(3)		(3)		Dividends declared - noncontrolling interest of subsidiary preferred stock	—	—		—	—		—		—		—		(3)		(3)
Other (b)		—	—		(117)	0		(1)		—		—		—		(1)
Balance, March 31, 2020		1,000	$	96	311,863	$	195	$	2,939	$	1,666	$	(135)	$	295	$	5,056

Balance, March 31, 2022																		Balance, March 31, 2022	31,686	$	1,014	534,587	$	334	$	4,769	$	2,996	$	(712)	$	295	$	8,696


PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 1—BASIS OF PRESENTATION & ACCOUNTING POLICIES


~~FIRST HORIZON CORPORATION~~			1114			~~1Q21~~1Q22 FORM 10-Q REPORT


~~FIRST HORIZON CORPORATION~~Table of Contents			NOTE 2—INVESTMENT SECURITIES			13			~~1Q21 FORM 10-Q REPORT~~


INVESTMENT SECURITIES AT MARCH 31, 2022										INVESTMENT SECURITIES AT MARCH 31, 2022
		March 31, 2021									March 31, 2022
(Dollars in millions)	(Dollars in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		(Dollars in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available for sale:	Securities available for sale:									Securities available for sale:
U.S. treasuries		$	610	$	0	$	0	$	610

Government agency issued MBS	Government agency issued MBS	4,009		68		(39)		4,038		Government agency issued MBS	$	5,364	$	3	$	(321)	$	5,046
Government agency issued CMO	Government agency issued CMO	2,463		19		(41)		2,441		Government agency issued CMO	2,881		1		(167)		2,715
Other U.S. government agencies	Other U.S. government agencies	733		5		(13)		725		Other U.S. government agencies	997		—		(61)		936
Corporate and other debt		40		0		0		40

States and municipalities	States and municipalities	467		9		(1)		475		States and municipalities	581		2		(38)		545
Total securities available for sale (a)										Total securities available for sale (a)	$	9,823	$	6	$	(587)	$	9,242
		$	8,322	$	101	$	(94)	8,329
AFS securities recorded at fair value through earnings:
SBA-interest only strips (a)								22
Total securities available for sale (b)								$	8,351
Securities held to maturity:										Securities held to maturity:
Government agency issued MBS										Government agency issued MBS	$	499	$	—	$	(37)	$	462
Government agency issued CMO										Government agency issued CMO	202		—		(14)		188
Total securities held to maturity										Total securities held to maturity	$	701	$	—	$	(51)	$	650


INVESTMENT SECURITIES AT YE 2021										INVESTMENT SECURITIES AT YE 2021
		December 31, 2020									December 31, 2021
(Dollars in millions)	(Dollars in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		(Dollars in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available for sale:	Securities available for sale:									Securities available for sale:
U.S. treasuries		$	613	$	0	$	0	$	613

Government agency issued MBS	Government agency issued MBS	3,722		92		(2)		3,812		Government agency issued MBS	$	5,062	$	42	$	(49)	$	5,055
Government agency issued CMO	Government agency issued CMO	2,380		29		(3)		2,406		Government agency issued CMO	2,296		8		(47)		2,257
Other U.S. government agencies	Other U.S. government agencies	672		12		0		684		Other U.S. government agencies	861		4		(15)		850
Corporate and other debt		40		1		(1)		40

States and municipalities	States and municipalities	445		15		0		460		States and municipalities	535		11		(1)		545
Total securities available for sale (a)										Total securities available for sale (a)	$	8,754	$	65	$	(112)	$	8,707
		$	7,872	$	149	$	(6)	8,015
AFS securities recorded at fair value through earnings:
SBA-interest only strips (a)								32
Total securities available for sale (b)								$	8,047
Securities held to maturity:										Securities held to maturity:
Government agency issued MBS										Government agency issued MBS	$	509	$	—	$	(5)	$	504
Government agency issued CMO										Government agency issued CMO	203		—		(2)		201
Total securities held to maturity										Total securities held to maturity	$	712	$	—	$	(7)	$	705


~~FIRST HORIZON CORPORATION~~			1415			~~1Q21~~1Q22 FORM 10-Q REPORT


PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents ~~Note 3 – Investment Securities (Continued)~~			NOTE 2—INVESTMENT SECURITIES


DEBT SECURITIES PORTFOLIO MATURITIES						DEBT SECURITIES PORTFOLIO MATURITIES
		Available for Sale					Held to Maturity				Available for Sale
(Dollars in millions)	(Dollars in millions)	Amortized Cost		Fair Value		(Dollars in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Within 1 year	Within 1 year	$	758	$	759	Within 1 year	$	—	$	—	$	52	$	52
After 1 year through 5 years	After 1 year through 5 years	146		148		After 1 year through 5 years	—		—		118		115
After 5 years through 10 years	After 5 years through 10 years	345		348		After 5 years through 10 years	—		—		349		328
After 10 years	After 10 years	601		617		After 10 years	—		—		1,059		986
Subtotal	Subtotal	1,850		1,872		Subtotal	—		—		1,578		1,481
Government agency issued MBS and CMO (a)	Government agency issued MBS and CMO (a)	6,472		6,479		Government agency issued MBS and CMO (a)	701		650		8,245		7,761
Total	Total	$	8,322	$	8,351	Total	$	701	$	650	$	9,823	$	9,242


	As of March 31, 2022
	Less than 12 months				12 months or longer				Total
(Dollars in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses

Government agency issued MBS	$	4,014	$	(228)	$	848	$	(93)	$	4,862	$	(321)
Government agency issued CMO	1,679		(78)		837		(89)		2,516		(167)
Other U.S. government agencies	668		(37)		214		(24)		882		(61)

States and municipalities	474		(37)		8		(1)		482		(38)
Total	$	6,835	$	(380)	$	1,907	$	(207)	$	8,742	$	(587)


~~FIRST HORIZON CORPORATION~~			1516			~~1Q21~~1Q22 FORM 10-Q REPORT


~~FIRST HORIZON CORPORATION~~			1617			~~1Q21~~1Q22 FORM 10-Q REPORT


PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 3—LOANS & LEASES


LOANS AND LEASES BY PORTFOLIO SEGMENT						LOANS AND LEASES BY PORTFOLIO SEGMENT
(Dollars in millions)	(Dollars in millions)	March 31, 2021		December 31, 2020		(Dollars in millions)	March 31, 2022		December 31, 2021
Commercial:	Commercial:					Commercial:
Commercial and industrial (a) (b)	Commercial and industrial (a) (b)	$	28,421	$	27,700	Commercial and industrial (a) (b)	$	26,903	$	26,550
Loans to mortgage companies	Loans to mortgage companies	5,530		5,404		Loans to mortgage companies	3,895		4,518
Total commercial, financial, and industrial	Total commercial, financial, and industrial	33,951		33,104		Total commercial, financial, and industrial	30,798		31,068
Commercial real estate	Commercial real estate	12,470		12,275		Commercial real estate	12,487		12,109
Consumer:	Consumer:					Consumer:
HELOC	HELOC	2,270		2,420		HELOC	1,894		1,964
Real estate installment loans	Real estate installment loans	8,783		9,305		Real estate installment loans	8,980		8,808
Total consumer real estate	Total consumer real estate	11,053		11,725		Total consumer real estate	10,874		10,772
Credit card and other	Credit card and other	1,126		1,128		Credit card and other	853		910
Loans and leases	Loans and leases	$	58,600	$	58,232	Loans and leases	$	55,012	$	54,859
Allowance for loan and lease losses	Allowance for loan and lease losses	(914)		(963)		Allowance for loan and lease losses	(622)		(670)
Net loans and leases	Net loans and leases	$	57,686	$	57,269	Net loans and leases	$	54,390	$	54,189


C&I PORTFOLIO																						C&I PORTFOLIO
		March 31, 2021																					March 31, 2022
		C&I
(Dollars in millions)	(Dollars in millions)	2021		2020		2019		2018		2017		Prior to 2017		LMC (a)		Revolving Loans		Revolving Loans converted to term loans (b)		Total		(Dollars in millions)	2022		2021		2020		2019		2018		Prior to 2018		LMC (a)		Revolving Loans		Revolving Loans Converted to Term Loans (b)		Total
Credit Quality Indicator:	Credit Quality Indicator:																					Credit Quality Indicator:
Pass (PD grades 1 through 12) (c)	Pass (PD grades 1 through 12) (c)	$	2,368	$	7,915	$	4,572	$	2,174	$	1,600	$	3,038	$	5,530	$	5,535	$	14	$	32,746	Pass (PD grades 1 through 12) (c)	$	1,445	$	6,983	$	3,529	$	2,764	$	1,045	$	2,278	$	3,895	$	8,047	$	12	$	29,998

Special Mention (PD grade 13)	Special Mention (PD grade 13)	5		68		65		51		28		81		0		189		7		494		Special Mention (PD grade 13)	2		53		57		36		37		45		—		92		—		322
Substandard, Doubtful, or Loss (PD grades 14,15, and 16)	Substandard, Doubtful, or Loss (PD grades 14,15, and 16)	35		148		80		124		35		94		0		148		47		711		Substandard, Doubtful, or Loss (PD grades 14,15, and 16)	21		34		72		48		99		41		—		112		51		478

Total C&I loans	Total C&I loans	$	2,408	$	8,131	$	4,717	$	2,349	$	1,663	$	3,213	$	5,530	$	5,872	$	68	$	33,951	Total C&I loans	$	1,468	$	7,070	$	3,658	$	2,848	$	1,181	$	2,364	$	3,895	$	8,251	$	63	$	30,798


CRE PORTFOLIO
	March 31, 2022

(Dollars in millions)	2022		2021		2020		2019		2018		Prior to 2018		Revolving Loans		Revolving Loans Converted to Term Loans		Total

Credit Quality Indicator:
Pass (PD grades 1 through 12)	$	1,224	$	3,975	$	2,837	$	2,180	$	538	$	1,085	$	264	$	—	$	12,103
Special Mention (PD grade 13)	25		15		134		25		—		18		—		—		217
Substandard, Doubtful, or Loss (PD grades 14,15, and 16)	1		89		24		15		2		25		11		—		167







Total CRE loans	$	1,250	$	4,079	$	2,995	$	2,220	$	540	$	1,128	$	275	$	—	$	12,487